Fi360 Fiduciary Score®
For over 15 years, the Fi360 Fiduciary Score® has been used as a transparent and objective investment rating system used to evaluate open-ended mutual funds, ETFs, collective investment trust funds and group retirement annuities. It helps financial professionals demonstrate a prudent investment selection and monitoring process with highly visual displays that all clients can easily understand.
The Fi360 Fiduciary Score® is available through each of our Fi360 Toolkit™ software options and can be purchased through a Data License. The score is also used to produce our quarterly Top Quartile Report.
How the Score is Built
The Fi360 Fiduciary Score® is a peer percentile ranking of an investment against a set of quantitative due diligence criteria selected to reflect prudent fiduciary management. The score is calculated monthly for investments with at least a three-year history.
Calculation Process
- Each investment is evaluated against the individual criterion (factors and thresholds) identified below.
- If an investment fails a criterion, points are allotted.
- Next, the points are totaled and the total for each investment is ordered from lowest to highest within each peer group.
- Each investment is then given a percentile ranking based on its placement in the distribution of their peer group.
Fi360 Fiduciary Score Criteria
The following factors and thresholds are used in the Fi360 Fiduciary Score® calculation.
- Regulatory oversight: Unregistered investments are excluded by Fi360's calculations.
- Minimum track record: Investments have at least three years of history to be scored.
- Stability of the organization: The same portfolio management team has been in place for at least two years.
- Assets in the investment: The investment should have at least $75 million under management (across all share classes.)
- Composition consistent with asset class: At least 80% of the investment's underlying securities should be consistent with the broad asset class.
- Style consistency: The product must be highly correlated to the asset class of the investment option.
- Expense ratios/fees relative to peers: The product's fees should not be in the bottom quartile of their peer group.
- Risk-adjusted performance relative to peers: The product's risk-adjusted performance (calculated using Sharpe ratio and alpha) should be above the peer group median manager's risk-adjusted performance.
- Performance relative to peers: The product's performance should be above the peer group's median manager return for 1-, 3-, and 5-year cumulative periods.
Don’t Take Our Word For It
Take someone else’s. The Center for Financial Planning & Investment studied the Fi360 Fiduciary Score® and found that funds scoring in the top quartile (green) provide, on average, higher future investment returns, reduced risk and more consistency than those scoring worse.
