UBS Fund Spotlight

Fund research the way you want it

The financial sector is in a constant state of upheaval. Regulatory requirements on product selection are mounting, while fiercer competition is squeezing margins ever more tightly. No wonder then some companies are increasingly having to ask themselves what their own core competencies are and what services they could or should bring in from an external partner to deliver better outcomes for the companies themselves and their clients.

One such area is fund research. Delegating at least parts of this process to an independent specialist might make sense. One such one is Morningstar, a globally respected fund research and data specialist. UBS Fondcenter, in partnership with Morningstar, provides access to its research via the Fund Spotlight service.

A 100% focus on analysis is fundamental for finding the best possible investment solutions for clients. For fund selection to be successful, it is necessary to have access to an extensive fund database, highly sophisticated analysis, research and assessment methods, and long-standing contacts with fund providers around the world.

Morningstar analysts’ ratings are presented in a very clear and standardized manner and they are constantly refined. Users get a clear description of what to expect from a fund. The information they provide is an important part of the decision-making process, e.g. to decide whether a passive, index-tracking solution or an active fund is more appropriate, or which share class would be the best fit.

Resources that would, say, be tied-up in reporting can be redirected to other tasks such as supporting clients. The fund research processes always meet the highest standards and this ensures good governance in this area.

UBS Fund Spotlight helps users find their way around UBS Fondcenter’s extensive and rapidly growing fund universe even better.

Five steps to becoming fund favorites

Source: Morningstar, 2020.

Users looking for appropriate funds via Fund Spotlight can choose from over 400 fund providers (as of April 2020) at the UBS Fondcenter. The next step is to decide which asset classes should be covered by funds. Based on your clients’ needs, Morningstar generates a list of the most eligible funds and takes into account whether there are any advantages from an active or passive product in a given segment. Sustainability criteria can also play a role in this selection process.

Morningstar specialists have built up a fund universe based on the quantitative and qualitative analyses of their 175 analysts worldwide. This gives you access to Morningstar’s best fund ideas – a standardized fund list or a fund selection tailored to your specific needs. If possible, active and passive funds are included across asset classes, including the increasingly important sustainability and ESG funds.

Ditching the set menu for a la carte

External fund research must always meet the highest standards, but the range of available services can vary. This mean UBS Fund Spotlight has three different service levels:

Standard

Do you want a list of 50 funds in the most popular asset classes and basic reporting?

Fund List

Fund List

Asset Classes

Asset Classes

Fund Universe

Fund Universe

Reporting

Reporting

Monitoring

Monitoring

Changes

Changes

Fund List

Morningstar high conviction list of 50 funds

Asset Classes

Pre-determined blend of broad asset classes across

Government bonds

Corporate bonds

Developed market equities

Emerging market equities

Fund Universe

Positively rated by Morningstar Analysts (Qualitatively rated funds only)

Reporting

Morningstar Fund Report

Condensed Analyst Report

Change Rationale Document

Monitoring

Ongoing quantitative and qualitative surveillance

Changes

Changes only when deemed necessary

Reported to clients upon change

Initial offering

lists available
EMEA including CH
APAC

Currencies

Enhanced

Do you want a list of several hundred funds, including country and regional funds, and extended reporting?

Fund List

Fund List

Asset Classes

Asset Classes

Fund Universe

Fund Universe

Reporting

Reporting

Monitoring

Monitoring

Changes

Changes

Fund List

Extended universe of around 500 funds

Asset Classes

Pre-determined options across

Government bonds

Corporate bonds

Developed market equities

Emerging market equities

Including single country or regional funds

Fund Universe

Positively rated by Morningstar Analysts

Expanded by using funds with a positive Morningstar Quantitative Rating

Reporting

Morningstar Fund Report

Condensed Analyst Report

Change Rationale Document

Morningstar Quantitative Rating Report1

Fund Research Report

Monitoring

Ongoing quantitative and qualitative surveillance

Changes

Changes only when deemed necessary

Reported to clients upon change

Initial offering

list encompassing
EMEA & APAC

Currencies

Premium

Do you want a tailor-made fund list and comprehensive reporting?

Fund List

Fund List

Asset Classes

Asset Classes

Fund Universe

Fund Universe

Reporting

Reporting

Monitoring

Monitoring

Changes

Changes

Fund List

Bespoke list tailored to client requirements1

Asset Classes

Tailored to client demand

Fund Universe

Positively rated by Morningstar Analysts

Expanded by using funds with positive Morningstar Quantitative Rating

Reporting

Morningstar Fund Report

Condensed Analyst Report

Change Rationale Document

Fund Research Report2

Morningstar Quantitative Rating Report2

Quarterly Market Commentary

Exception Reporting for Select List

Select List Quarterly Factsheet

Investment Committee Presentation

Monitoring

Ongoing quantitative and qualitative surveillance

Senior Morningstar attendance at client investment & governance Committee2

Changes

More frequent changes based on changes in market and stronger convictions elsewhere

Reported to clients upon change

The Tool

Intuitive and quick access to the information you need

Source: Morningstar, Enterprise Components - Screener, 2020

Our partner

Morningstar is a leading independent global research and data provider that has been supplying quantitative and qualitative analyses of investment products for over three decades. It employs over 125 fundamental analysis experts and 50 data and research specialists at 11 locations worldwide. They analyze the funds and assess them with Morningstar’s well-known ratings. The Morningstar Manager Selection Team uses this analysis to create the fund lists based on and in line with clients’ preferences.

Morningstar ratings

The classic Star Rating is awarded on the basis of fund performance to date. To obtain a rating, a fund must have been on the market for at least three years. Risk-adjusted performance is measured and a fund receives one to five stars, depending on how it does within the same fund category. The Star Rating is the first step in the fund selection process and is recalculated every month.

The Analyst Rating indicates an analyst’s assessment of whether a fund can continue to outperform its peer group or an index over an entire market cycle. Depending on the analyst’s opinion, the funds receive a Gold, Silver or Bronze rating. Funds receiving an Analyst Rating are usually of a certain size and have a high degree of recognition. Five criteria count in the rating: people, companies, processes, performance, and costs. Key components of the analysis are personal interviews with the fund management team, data collected by Morningstar itself, and the fund documents. Analyst Ratings are updated at least every 14 months and indicate which funds will probably deliver better performance than comparable products over the coming market cycle.

A Quantitative Rating is awarded to funds or ETFs that have no Analyst Rating but are in a category where such ratings are issued. It is based on a quantitative model that replicates analysts’ decision-making processes. To arrive at the rating analysts refer to their previous rating decisions and the data used to support these decisions. The rating expresses an assessment that a Morningstar analyst could assign to the fund if he or she were to analyze the fund. Gold, Silver and Bronze ratings equate to a positive assessment. Quantitative Ratings are recalculated monthly and also give investors an assessment of a fund’s future performance.

Morningstar’s Sustainability Rating indicates how well the companies or countries represented in a fund portfolio as equities or bonds deal with their environmental, social and governance risks and opportunities.

Have we sparked your interest in UBS Fund Spotlight? Our client advisors will be happy to provide you with any other information you may need.

UBS Fund Spotlight

©2020 Morningstar. All Rights Reserved.

Morningstar’s fund ratings are not a market call, a credit or risk rating, and do not replace a user from conducting their own due diligence on the fund. Fund ratings are not a suitability assessment, a statement of fact, and should not be used as the sole basis in evaluating a fund. Morningstar ratings involve unknown risks and uncertainties which may cause Morningstar’s expectations not to occur or to differ significantly from what we expected. Morningstar does not guarantee the completeness or accuracy of the assumptions or models used in determining the quantitative fund ratings. Except as otherwise required by law or provided for in a separate agreement, Morningstar and its officers, directors, and employees shall not be responsible or liable for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses, or opinions in regard to the use of Morningstar’s fund ratings. The past performance of a security is not a reliable indicator of future results.

For more important information about Morningstar’s ratings and methodology please go to https://www.morningstar.com/research/signature?cid=RED_RES0002

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