ARC Publishes Global Master Criteria For Rating Funds and Asset Managers

London, 22 November, 2019 - ARC Ratings has published its Global Master Criteria For Rating Funds and Asset Managers. This is an update to the methodology published on 22 November 2018. This methodology can be accessed at

ARC’s fund ratings are an independent assessment of a specific fund’s exposure to factors that could lead to unexpected Net Asset Value (“NAV”) and total return volatility. Fund stability ratings address a fund's exposure to interest rate risk, credit risk, liquidity risk, concentration risk, prepayment and extension risk, derivatives risk and currency risk that may increase the volatility of the fund's NAV. This assessment begins with an analysis of the fund’s historical performance in terms of price and total return volatility, and then focuses on the fund’s portfolio quality and market risk exposure. This assessment is made within the context of a review of the fund manager, a fund’s published investment objectives, and policies. ARC’s fund ratings indicate an opinion regarding the fund’s ability to preserve principal value under varying market conditions that may be affected by credit, liquidity, and also other market conditions. A fund rating may apply to money market funds, mutual bond funds, ETFs, income trusts and other applicable investment vehicles.

An ARC Rating is not a recommendation to buy, sell or hold units in a rated fund.

ARC’s asset manager ratings (“management quality” or “mq” ratings) assess an asset manager’s organisational structures, risk management capabilities, management characteristics, and operational practices and controls, in order to arrive at the organisation’s overall quality. The ratings are intended to help investors assess the skill sets of the wide range of portfolio managers, and facilitate the process of evaluating investment management firms’ overall quality, regardless of size, ownership structure, and its scope of operations.

This integrated report details the rating factors that are considered by ARC when assigning any rating within the scope of the criteria. However, each specific rating report and/or release will discuss those factors most relevant to the individual rating action (as not all factors may be valid).

It should be noted that fund and asset manager ratings do not carry the (sf) modifier.

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