Insights

With several funds investing in a similar universe of stocks, telling them apart is not always easy. Returns and star ratings can help narrow the choice, but they do not show how a fund behaved along the way.

Multi-Act’s Short-Term Fall-Bounce Classification compares funds with their category median and groups them into four patterns:

• Superheroes fell less and bounced more.
• Shields fell less and bounced less.
• Bungee Jumpers fell more and bounced more.
• Eggs fell more and bounced less.

These are not permanent labels. They offer a simple way to understand the balance between resilience when markets fall and participation when they rise.

Used alongside measures such as portfolio quality, valuation and turnover, the framework gives investors and advisers a clearer view of what lies behind a fund’s performance.

Read the full article to explore the framework.