The Fi360 Toolkit generates numeric scores for open-end mutual funds, exchange-traded funds, and group retirement plan annuities. As of August 2014, separate accounts and variable annuities pass through a similar screen but will not receive a numeric Fi360 Fiduciary Score. The Investment Profile Report is useful for separate accounts and variable annuities.
The methodology utilized to evaluate separate accounts is similar to the due diligence criteria found in the Fi360 Fiduciary Score with one exception. The expenses relative to peers screen is replaced with a correlation relative to peers screen, known as the R2 value of the investment product. This measures the strength of the manager’s performance statistics to a market index. The actual R2 is measured against the broad index, but the relative ranking is against the peer group. The threshold for the R2 is greater than or equal to the 75th percentile
The methodology utilized to evaluate variable annuities is, again, similar to the due diligence criteria with one exception. The expenses relative to peers screen is replaced with a calculated expense ratio (Audited Expense Ratio + M & E Risk Charge). The threshold for the calculated expense ratio is greater than or equal to the 75th percentile.