In the Papers this weekend: Unit Trust Ratings and Rankings

Photo: Hurricane Isabel - The Baltimore Sun

Do ratings serve a purpose or are they just past performance hurricane hunters? Bearing in mind that past performance is not necessarily a guide to future performance. Ratings can serve a purpose by letting investor get a sense of each fund's risk adjusted return and give one an idea of how well a company performs relative to their peers.

So, why are there hurricane hunters? The impact of data saves lives. Since people believe the forecast, they heed warning areas and evacuate the affected areas. Without the hurricane reconnaissance, the negative impact on forecast accuracy could be devastating.

Similarly - ratings can simplify ones investment selection. If used correctly, ratings are a measure of data - that is easily understood, objective and effective. The Silke Financial Services quantitative and qualitative rating data is provided by Profile Group (Pty) Ltd through Allan Gray Proprietary Limited and independent financial services group Fundhouse.

Quantitative data allows one to do in-depth fund analysis and compare funds and benchmarks registered with the FSB. Quantitative data used to view and compare:

Performance

• Graphs and tables showing the historic performance for selected periods
• The monthly rolling return for selected periods

Fund distributions

• Historic distributions
• Annual income yields

Investment allocation

• Asset allocation, including trends for selected periods
• Asset allocation comparisons
• Sector allocation
• Fund holdings

Risk

• Risk versus return graph (scatterplot)
• Various risk measures
• Maximum drawdown graphs
• Correlation tables

Fundhouse's qualitative research process focuses on all elements which drive long-term investment success, including the business structure within which the fund operates, the fund management team (their beliefs and the principles they follow in making decisions), team dynamics and culture, as well as evidence of the investment process being followed consistently. This approach offers the highest degree of comfort that the fund is being managed appropriately. Fundhouse compiles detailed evidence by engaging in face-to-face interviews with investment teams and conducting due diligences. Fundhouse gathers as much information as possible to make sure that the evidence is related to future outcomes, and not based on past returns.

The below table ranks companies as reported on in the Personal Finance July 23, 2016 with how Silke Financial Services would rank these companies. See the article on IOL Personal Finance

The above ratings are merely for information purposes, do not relate to the future performance of the companies and should not be construed as investment advice.

Our integrated wealthcare approach is based on your personal priorities and aspirations. This process is designed to give you a clear course of action for pursuing your goals that span various time horizons and life stages to empower you to do extraordinary things with your wealth, both now and in the future.

Regards,

Shane Thom, CFP® GTP(SA)™
Managing Partner: Integrated Wealthcare Advisor