Evaluating the Rating of Stiftung Warentest: How Good are Mutual Fund Ratings and Can They Be Improved?

European Financial Management, 20 (2014), 207-235

43 Pages Posted: 19 Mar 2011 Last revised: 3 Mar 2015

See all articles by Sebastian Müller

Sebastian Müller

Technische Universität München (TUM) - TUM School of Management

Martin Weber

University of Mannheim - Department of Banking and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: July 27, 2011

Abstract

We test the abilities of the Stiftung Warentest fund rating system to predict future fund performance among German registered funds for six equity categories: Germany, Euro-Zone, Europe, North-America, Pacific, and World. Stiftung Warentest is a consumer protection agency and a major provider of fund ratings in Germany. Our empirical analysis documents predictive abilities of the rating system. The reason is that measures of past performance are positively related to future performance in several of these markets, even after controlling for momentum. Measures of fund activity are also helpful to predict performance, and in particular to identify likely future losers.

Keywords: mutual funds, performance evaluation, performance persistence, mutual fund ratings, active management

JEL Classification: G11, G12, G1

Suggested Citation

Müller, Sebastian and Weber, Martin, Evaluating the Rating of Stiftung Warentest: How Good are Mutual Fund Ratings and Can They Be Improved? (July 27, 2011). European Financial Management, 20 (2014), 207-235, Available at SSRN: https://ssrn.com/abstract=1785319

Sebastian Müller (Contact Author)

Technische Universität München (TUM) - TUM School of Management ( email )

Germany

Martin Weber

University of Mannheim - Department of Banking and Finance ( email )

D-68131 Mannheim
Germany
+49 621 181 1532 (Phone)
+49 621 181 1534 (Fax)

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