Posted inUnited States

When on a fund hunt, what matters most?

The total expense ratio tops the list as the most meaningful fund selection criterion, with almost two thirds of survey respondents considering it very important. Risk-adjusted returns and risk-measures such as standard deviation come second, with 55% deeming those very important selection criteria and another 36% finding it somewhat important.

The track record: an Atlantic divide

Asset managers’ ‘overall strength’ (whatever that may exactly mean) only scores a little lower, with 45% attaching a lot of importance to it. Surprisingly, historical performance is valued much less, with only 18% deeming it a very important criterion. This lack of historic interest among the Americans contrasts sharply with the general attitude of European fund selectors. Most of them consider the track record of a fund as the single most important fund selection metric.

Oddly enough, American fund analysts appear to care more about the length of the tenure of a fund manager at a particular fund than about the past performance of that fund. The number of respondents classifying the former criterion as ‘very important’ is twice as high, at 36%.  

Part of the Bonhill Group.