by CI Staff
FundReveal is a new website from Investment Risk Management Systems, Inc. (IRMS) that touts analytics to help users identify low-risk mutual funds with a high probability of persistently beating the market. The site offers both free and fee-based research on a universe of nearly 17,000 U.S. mutual funds.
The site stresses the importance of chasing "persistence" and not performance when selecting mutual funds for your portfolio. FundReveal attempts to rate a fund's investment decision making capability by analyzing the risk-return behavior of the fund over time. According to FundReveal, the best funds are those that persistently outperform the market while taking on less risk.
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At the heart of the site's analysis is the FundReveal Universe Comparison Graph. It shows a fund's annualized average return on the vertical axis and risk (volatility of returns) versus the entire universe of funds on the horizontal axis. The graph is divided into four quadrants, with the S&P 500 residing at the intersection of the vertical and horizontal axes. The upper left-quadrant is for Category A (Best) funds that have outperformed the S&P 500 and have done so with lower risk. These are the most desirable funds in the universe, with those farther to the top and to the left being most desirable. Category B (Risky) funds are in the upper-right quadrant and have outperformed the S&P 500, albeit with more risk. Category C (Less Risky) funds are in the lower-left quadrant of the FundReveal Universe Comparison Graph and have less risk than the S&P 500, but also have lower returns. Finally, Category D (Worst) funds are in the lower-right quadrant of the graph. These funds are the least desirable and have underperformed the S&P 500 with higher risk.
The site offers free Basic FundReveal Reports, which include FundReveal Fund Universe Comparison Graphs for up to 10 funds at a time. These free reports also allow you to specify the time period used for the analysis. You can specify cumulative periods of up to 10 years or independent years since the start of 2001. Basic FundReveal reports also include summary tables offering summary statistics for the funds you specified for the report, including annualized average return, annualized worst-case return, risk-return rating, persistence rating, up market excess return rating, and down market excess return rating.
For $250 a year, premium subscribers can access FundReveal reports that also include risk-return ratings for the last 20 quarters and a detailed performance time series for the funds you specify. Premium subscribers can also generate an unlimited number of reports, while free users can create "only" 2,000 reports.