S&P Capital IQ plans to change its current system of fund ratings to platinum, gold, silver and bronze.
The previous system, denoted by the AAA,AA, A and TR ratings, are to be replaced with the new labels based on a “unprecedented transformation of the fund management industry”, including the anticipation of an increase in demand for ratings.
Peter Fuller, head of European research at S&P Capital IQ, says: “We’ve seen a surge of new entrants into the funds market place in spite of some tough market conditions. The growth of new boutiques and niche proposition providers is driving the need for more robust analysis based on a flexible and pragmatic approach that encompasses insight into new products and deep knowledge of a fund manager’s investment record.” (article continues below)
S&P Capital IQ says increased demand for ratings will be driven by merger and acquisition activity, consolidation of funds and market development.