Fi360’s Top Quartile Fiduciary Scores

This quarter, 29,094 mutual fund (MF), exchange-traded fund (ETF) and collective investment trust fund (CIT) investments received an Fi360 Fiduciary Score and 20.5 percent achieved the highest mark, passing the scrutiny of nine rigorous filters.

Investment selection and monitoring is an important fiduciary responsibility, and the Fi360 Fiduciary Score has been designed to help the marketplace understand if investments are performing well from a fiduciary perspective.

This quarter, we look at how MF, ETF and CIT managers perform broadly against each other on Fi360’s Fiduciary Score.

Not surprisingly, CIT managers perform the best, with 27.6 percent having 50 percent or more of their investments in the top quartile vs. 15.8 percent of ETF managers and 12.2 percent of MF managers.

At the individual share class level, 29 percent of CITs, 23 percent of ETFs and 19 percent of MFs received perfect scores respectively.

While certain vehicles have better average scores than others, using investment vehicle type alone as a fiduciary selection criterion is unwise; there are plenty of poor performing CITs as well. A prudent evaluation requires meaningful reviews of a broad set of fiduciary criteria, like those found in our Fiduciary Score.

Since 2003, Fi360 has ranked asset managers based on the percentage of their investments that received a top Fi360 Fiduciary Score. Advisors use the Fi360 Fiduciary Score, and these rankings, to cull their investment lists.

Asset managers use our scores to evangelize their funds and select investments for fund-of-fund strategies.

We’re proud of the supporting role we play in advisor and asset manager processes. Helping enable you to profitably implement prudent fiduciary practices is our passion. We will continue to monitor our score criteria and methodology – looking for ways to raise the bar.

What We Measure

The Fi360 Fiduciary Score is a peer percent ranking of an investment against a set of quantitative due diligence criteria selected to reflect prudent fiduciary management.

Fi360 evaluates four investment universes: Open-End Mutual Funds (MFs), Exchange-Traded Funds (ETFs), Collective Investment Trusts (CITs) and Group Annuities (GRPAs). It is important to note that asset managers may report multiple names.

For example, Principal Life Insurance Company and Principal Funds will appear as separate asset managers; Charles Schwab Bank appears separately from Schwab Funds.

The Fi360 Fiduciary Score, which ranges from 0 to 100 (with zero being the most preferred mark), is calculated monthly for registered investments with at least three years of history.

Asset managers must contain at least two distinct investments with a three-year history to be considered in the ranking.

Fiduciary best practices require advisors to document a consistent, prudent process. This is where we can help; Fi360 literally wrote the book on prudent fiduciary practices. And then we created the Fi360 Fiduciary Score to help advisors cull their investment selections using a fiduciary standard of care. The complete Fi360 Fiduciary Score methodology is available here.

Fi360 Fiduciary Score Ranges

1^st Quartile          (0 – 25)

2^nd Quartile         (26 – 50)

3^rd Quartile         (51 – 75)

4^th Quartile         (76 – 100)

A sample:

John Faustino, AIF, is Chief Product and Strategy Officer with Pittsburgh-based Fi360.

John Faustino, AIF

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John Faustino, AIF, is Chief Product and Strategy Officer with Pittsburgh-based Fi360.

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