HONG KONG - Mercer Investment Consulting is to launch MercerFundWatch.com in Hong Kong at the beginning of April.
Targeting funds in the Mandatory Provident Fund (MPF) system, as well as other retail and DC funds, MercerFundWatch seeks to rate funds with between one and five stars, the results of which will be published on a dedicated website.
The results are reported back to the manager, however, if the manager does not want to have this rating known, Mercer would not put it on the website, or make it public knowledge.
The service will be offered free to clients and subsidised by the managers rated in the system, who will pay a flat fee per product.
“If we are going to rate people poorly, we rate people poorly, and that’s the format,” said Alan Flynn, director, North Asia, Mercer Investment Consulting.
“We can’t afford to rate bad managers well to get money in, because then no one will value the product that we are selling. We have to be clear from the start, that fund managers will get bad ratings if we don’t rate their product highly. We are very open with fund managers.”
Mercer’s ratings process is forward-looking and qualitative in nature, and to a large extent follows the manager research process for institutional business, although the retail space tends to be less benchmark, and more absolute return driven, highlighted Flynn. MercerFundWatch.com also gives a view on fees.
Flynn added: “There’s not an awful lot of overlap, but the [manager research] process is still the same. We are still looking to rate people in the main categories; like idea generation, portfolio construction, implementation and business. We are applying the same methodology.”
There is no minimum fund size, or performance track record necessary to be rated.
Separately, Mercer is currently looking to add another full time researcher to its staff, as well as a business development manager for the MercerFundWatch product, based in either Singapore, but more likely in Hong Kong.
MercerFundWatch has been running in Singapore since late 2002, and rates some 75 products in this market.
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