SQM Research defends ratings process | Australian Markets

Research and ratings home SQM Research has expressed concern that its ratings processes with respect to the Shield and First Guardian funds haven’t been reported in an correct context.

SQM Research founder and managing director, Louis Christopher responded to media protection of the problem by stating that below his firm’s methodology the ratings of the 2 funds had been on the decrease finish of the dimensions.

Further, he famous that the ratings assigned to the funds have been under the minimal threshold of many platforms for inclusion.

“Some recent media coverage has not presented our ratings in full or accurate context,” he mentioned in a message to purchasers and on social media.

“SQM Research assigned ratings between 3.5 and 3.75 stars out of 5 to the above-mentioned funds over their lifecycle. These ratings reflected an ‘investment grade’ classification under our methodology, but they were at the lower end of that scale,” Christopher mentioned. “Ratings in this range may reflect characteristics such as limited operating history or areas of governance requiring monitoring. It’s also important to note that many platforms set a minimum threshold of 4 stars for product inclusion.”

“Both funds were subsequently downgraded when we became concerned about limited disclosure, irregularities, and a lack of information from the fund managers.”

Christopher mentioned that publicly obtainable commentary and statements from numerous events “suggest that the failure of the funds may involve irregularities in investment activities and the movement of investor funds”.

“It appears that these matters may not have been fully disclosed to ASIC, investors, advisers, platforms, or SQM Research. We understand that ASIC has been investigating these matters for a significant period of time and that questions remain,” his message mentioned.

“We’ve been in ongoing contact with our adviser and platform clients, and we appreciate their continued trust and understanding. We remain available to support all stakeholders during this period and welcome any questions regarding our research process or individual ratings,” Christopher mentioned.

SQM Research is the analysis accomplice for Financial Newswire’s Fund Manager of the Year Awards.