GERMANY - Fund industry association BVI has teamed up with rating agencies to unveil new transparency standards pertaining to how the agencies evaluate the performance of investment funds and their managers.

Under the standards, knows as RRTS, 13 major rating agencies in Germany have pledged to provide detailed information about their methodology and performance criteria. They also agreed to disclose their shareholder structure as well as what equity stakes they hold to inform investors about possible conflicts of interest.

Finally, the agencies agreed to explain the differences between “fund rankings” and “fund ratings.”

According to the BVI, a ranking involves the evaluation of an investment fund’s past performance without any future predictions. A fund rating, on the other hand, includes predictions on how the fund may perform in the future.

The new standards will come as a sigh of relief to German retail and institutional investors, who have, in particular, struggled with the differences between fund rankings and ratings.

The BVI noted that the new standards would enable German investors to far better judge the quality of information on investment funds from the 13 agencies.

Separately, BVI said Detlev Dietz, managing director at Commerz Grundbesitzgesellschaft, joined its board on December 16. Dietz replaces Willi Alda, a former real estate fund head at DekaBank. Alda left in October following charges of impropriety.

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