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Fund Evaluation

Japanese

Nomura Funds Research and Technologies Co., Ltd.(NFR&T) searches for superior investment products (funds, etc.) from across the globe using our proprietary analysis / evaluation process, which focuses on future reliability and expected performance.

NFR&T Fund Assessment: assessing future reliability and potential

Focus on Qualitative Evaluation

  • NFR&T emphasizes the qualitative approach when evaluating investment funds with regard to reliability and potential, recognizing the limits of quantitative analysis, as past performance is not always an indicator of future performance.

Proprietary Fund Evaluation through Detailed Research and Analysis

  • NFR&T's proprietary fund evaluation method is based on our experience gained through years of detailed research and analysis of funds. Each fund is evaluated by multiple analysts who, while using the evaluation system, employ consistent evaluation criteria and strive for as objective and accurate an assessment as possible.
  • The results of this fund research, analysis and qualitative evaluations are provided in fund evaluation reports, as well as being used by NFR&T as the principal input data in investment advice to its funds of funds management.

Long Years of Expertise Getting Results in Fund Evaluation

  • Since launching our fund analysis and evaluation operations in 1996 (initially as part of the Investment Analysis section of Nomura Securities' Investment Trust Division), we have examined, analyzed and evaluated several thousand managed products all over the world, including mutual and pension funds.
  • Through years of success, we have continuously built up a body of expertise in fund evaluation.

Ensuring Reliable Fund Assessment through Continuous Research by Dedicated Analysts

Equity/Fixed Income Fund Research Universe

  • At NFR&T, a total of 45 (as of August 2016, including NFR&TA) analysts evaluate approximately 221 investment firms and 1,168 funds at least once each year, while core funds are evaluated monthly.
  • Outside of the abovementioned "continuous research universe," NFR&T carries out a wide range of survey activities, enabling investment advice to fund of funds management, provision of fund evaluation data, and facilitating fund selection.

Global Research Track Record

  • A basic policy of NFR&T fund evaluations is to carry them out locally, directly interviewing managers on-site.
  • Since NFR&T began analyzing and evaluating funds in 1996, we have expanded our scope of global research; headlined by 379 North American firms, 955 investment management firms have been visited around the world, including Japan and Europe.

Image:Investment Firm Visits by Region

NB : based on number of companies visited. As of the end of March 2016.

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NFR&T Qualitative Evaluation Process

At NFR&T, we do more than simply look at a fund's past performance - we study the factors behind a fund's performance and determine whether these will continue or not. To achieve this, we perform qualitative analyses in accordance with NFR&T's proprietary process shown in the chart below.

We receive many types of information directly from asset management firms. In addition to annual reports (discussing investing structure and processes), monthly reports (discussing portfolio data and investment conditions), and other data we request as needed, we perform a qualitative analysis of investment systems, performance, and disclosure from the standpoint of credibility and rationality by comparing investment performance to benchmarks and undertaking proprietary analyses of portfolio characteristics.

To maintain accuracy in our fund evaluations, all funds are continually reviewed by the same team of analysts, and analysts visit fund managers to speak with them directly, even if they are located overseas.

Image:NFR&T Qualitative Evaluation Process
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NFR&T's Expanding Fund Coverage

  • Starting with the evaluation of mutual funds distributed by Nomura Securities, NFR&T has now expanded the fund research universe into defined-contribution (DC) pension plan products, variable annuity (VA) products, and separately managed account (SMA) products.
  • We expect investment products to become increasingly diversified and sophisticated. At NFR&T, we will continue to expand our fund evaluation universe in response to customer needs, and improve the quality of fund of funds products.
Image:NFR&T Fund Evaluation Universe
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