Defaqto adds investment trust Diamond ratings

The company has run investment trust (investment company) star ratings for some time but has now added Diamond ratings to expand the depth of assessment.

Star ratings cover features and benefits while Diamond ratings cover performance and peer comparison.

Defaqto says the Diamond Ratings provide an independent assessment using quantitative and qualitative features. An investment trust review service is also in the pipeline.

Diamond Ratings provide a rating of 1 to 5 based on a detailed and structured scoring process, says Defaqto. 

Investments trusts are now rated according to risk-adjusted performance and competitiveness in areas such as cost, scale and manager longevity.

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In addition to Investment Trusts, Defaqto’s Diamond Ratings also cover: 

• Absolute Return Funds
• Risk Focused Fund Families
• Risk Targeted Fund Families
• DFM MPS (Direct) Portfolio Families
• DFM MPS (Platform) Portfolio Families
• Multi-Manager Return Focused Funds across the four relevant IA sectors – Mixed Investment 0-35% Shares; Mixed Investment 20-60% Shares; Mixed Investment 40-85% Shares; and Flexible Investment
• Single-Asset Return Focused Funds across UK equity; European ex-UK equity; North American equity; Japanese equity; Developed Pacific ex-Japan equity; Emerging Market equity; Global equity; UK government bonds; UK corporate bonds; and UK index linked bonds
• Index Trackers – Exchange Traded Funds and Open Ended Funds
• Income Funds – Multi-Asset; Equity; and Bond
• Workplace Pension Default Funds

Patrick Norwood, investment consultant at Defaqto, said: “The addition of investment trusts marks our initial response to a well-documented increase in consumer demand during the pandemic. 

“Historically, there hasn’t been information made available specifically for advisers, making it difficult to see where an investment trust sits within the market. Our Diamond Rating breaks down these barriers to that information. In the next 12 months, we’ll also add Investment Trust Reviews to our suite of qualitative Reviews.”

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