Zenith Investment Partners has launched a new ratings framework that is designed to specifically assess index funds after the company found there was an increased appetite in the industry for such a service.
The research house has added three new index fund rating categories – index highly recommended, index recommended and index approved – to Zenith’s existing system and will analyse product outcomes after fees.
Zenith plans to apply the new index fund rating system during its annual review cycle, which commences this month with the release of the research house’s Australian fixed interest, Australian equities and property sector reviews.
Zenith general manager and head of research Bronwen Moncrieff said the company has rated index funds for many years, but the dedicated ratings launch comes on the back of the industry’s increased demand for a quality rating solution.
“We’re confident the dedicated index rating methodology will be viewed favourably by the market and afford greater choice and information for advisers. Its rollout over the coming months forms an important part of our research strategy and service offering,” Moncrieff said.
“Responding quickly and effectively to this evolving market need is important in being able to offer advisers access to all the information required to make the right investment recommendations for their clients.”
In addition, she noted the growth in index products has created a trend of product releases among fund managers.
“As the number of traditional index products offered to the Australian retail investor expands, we’re seeing offerings from the largest fund managers complemented by a growing band of smaller players,” she said.