What are FE Passive Crown Fund Ratings?

Unlike an active fund which attempts to beat its designated benchmark, passive funds and ETFs attempt to track their index, with the aim of delivering a return as closely in line with it as possible. Comparing active and passive funds using the same rating methodology is therefore flawed.

As a result, FE has introduced the FE Passive Crown Fund Rating. Passive funds will be awarded between one and five P-Crowns, based on their ability to track their index.

It should be noted that passive funds generally have a much more focused objective than active funds, with the result that the range of outcomes is narrower for passives than for actives. Consequently the performance differences between top- and bottom-rated crown funds are narrower for passives.