S & P Will Launch Its Own System of Ranking Funds

Standard & Poor’s Corp., looking to capitalize on the growing demand for mutual fund information, plans to introduce its own fund-ranking system to financial service organizations early next year.

David Blitzer, chief economist at New York-based S&P;, said the ranking system will compete with other fund-tracking companies such as Morningstar and Lipper Analytical Services. But he said it won’t completely overlap what is already being offered.

S&P; will fill a niche by offering fund-ranking information to brokers who sell funds to retail investors, Blitzer said. Morningstar primarily serves retail investors and Lipper works more with fund companies, he said.

And “we feel ours will be a little easier to understand,” Blitzer said.

S&P; plans to introduce the as-yet-unnamed product over the Internet and through CD-ROM, with no hard-copy version at first.

Unlike Morningstar, which uses stars to “rate” funds, Blitzer said, S&P; will use a star system to “rank” funds.

He said the distinction is being made to emphasize that S&P;’s stars represent a fund’s past performance. Morningstar’s stars do the same, but some people think they suggest a prediction of future performance.

Even with the different approaches, Blitzer acknowledged, “the vast majority of funds will be consistent within the various rating systems.”