American Trust Fiduciary Monitoring Index

The American Trust Fiduciary Monitoring IndexSM (ATFMISM) is a composite percentile ranking of the over 20,000 mutual funds American Trust receives data for each quarter as compared to their investment category or peer group. For more information contact us today!

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Selection Criteria

When selecting investment managers (“funds”), American Trust relies on the ATFMI as the primary criterion and a range of secondary criteria as determined by the Trust Investment Committee. The ATFMI is intended to be a “bright line test,” pass or fail, whereas the secondary criteria are both quantitative and qualitative in nature. The secondary attributes, however, are only considered after the fund has passed with an acceptable ATFMI score. A list of some of the secondary criteria considered by American Trust is included below. American Trust also uses a variety of other tools and metrics to determine whether or not to invest in the fund, such as Morningstar, Fiduciary Analytics, and Bloomberg.

 

    • Fund Asset Size
    • Downside Probability
    • ATFMI Score Historical Consistency
    • Total Expense Ratio
    • Investment Style Consistency
    • DNRisk IndexSM
    • Performance Attribution Analysis
    • Overall Fund Longevity
    • 95th Percentile Worst Case
    • Manager Tenure
    • Multi Manager Approach
    • Overall Sortino Score Analysis
    • Management Legal History
    • 99th Percentile Worst Case
    • Downside Deviation Risk
    • Performance Relative to Risk
    • Revenue Sharing Fees
    • 75th Percentile Worst Case

The goal of the ATFMI is to identify the managers who are most likely to outperform peers next year.

HOW DOES IT WORK?

ATFMI Scoring

We created the American Trust Fiduciary Monitoring Index (ATFMI) as a proprietary ranking system. Funds are ranked 1 (best) to 100 (worst) by peer group. Funds may be added when they score 1 to 25. Funds scoring 41 or more are placed on Watch List; those on Watch List for two consecutive quarters are replaced.

Funds receive ATFMI scores that range between 1 and 100. A fund that receives a score of 1 would be considered to be in the top 1% of its peers, while a fund receiving a score of 10 would be considered to be in the top 10%. Scores are specific to investment categories so only Large Blend funds are scored against other Large Blend funds and only Intermediate-term Bond funds are scored against other Intermediate-term Bond funds and so on.

The calculation looks at more than just relative investment performance and incorporates numerous quantitative factors that have been found to be predictive in prior academic studies. For example, despite the fact that research indicates characteristics such as fund expense and portfolio turnover are relevant when assessing the likelihood a mutual fund will outperform its peers in the following year, most popular mutual fund ranking systems are based primarily on risk-adjusted performance.

Contact Us Today

Interested in learning more about the American Trust Fiduciary Monitoring Index? We are happy to assist you. Contact us today!