Investment Intelligence for Funds: Deep Mutual Fund and ETF Analysis with Fundwise

Mutual Funds have long been one of the most popular choices for investors, and alongside the introduction of ETFs in the 1990s, have become a leading option for investors of all categories and experience levels. In recent years, ETFs alone have reached a record $12.89 AUM. Funds offer investors the possibility of healthy returns coupled with the moderate risk a diversified portfolio can offer, representing a best-of-both-worlds option for many investors. In our webinar, Unlocking ETF Trends, ETF expert Deborah Fuhr offered a high level perspective on the factors that have led ETFs in particular to surge in popularity.

However, there are challenges when it comes to fund and ETF analysis, making it difficult to find, analyze, and choose the right fund to invest in. Investors face a seemingly endless array of options, with all kinds of funds focussed on different industry and investment categories, and multiple instances of the same kind of fund based on the same index.

That’s why we’ve developed Fundwise, a paradigm changing tool that brings transparency and deep insights to investors to help them find the fund that’s right for them and serves their investment goals.

Challenges of Finding the Right Fund

The biggest problem facing investors today when it comes to mutual fund and ETF analysis, is the lack of transparency in the information and research they have access to. Most information and recommendations for funds don’t detail the methodology they use to come to their conclusions.

Additionally, there are many funds, both within the US but also internationally, that are not covered by traditional analysis at all, either because they are smaller funds or due to global language barriers.

Critically, most fund analysis looks at the surface performance and cost of funds, rather than looking deep inside them to understand the performance of the individual assets they are made of.

Filling a Global Gap in Fund and ETF Analysis

In the current market landscape, there is a dearth of tools and solutions for analyzing funds. The few solutions that are available offer only a superficial comparison, highlighting a few metrics while not providing a detailed analysis of the underlying assets. In addition, most solutions are heavily focussed on US based ETFs and mutual funds since they are based on human analysts and their geographic considerations. This means little attention is paid to funds in other parts of the world.

In that space, Fundwise offers investors a powerful set of tools to understand ETFs and other funds, and provides broad global coverage of funds based all over the world. With AI-driven analysis, Fundwise is able to bridge the various language barriers that can impede a clear analysis of non-US funds, allowing investors to tap into markets no matter where they are and what language they speak.

Top-To-Bottom Fund and ETF Analysis

Another way Fundwise stands apart is the method used to provide recommendations and analysis of ETFs and funds. Fundwise helps investors see inside funds by analyzing each and every asset with a fund, and not just looking at surface parameters. This makes it easier to understand the funds composition, geographically and sector wise, helping investors see how the fund is exposed to global markets and industries.

This is only possible through Bridgewise’s proprietary AI technology. To perform a fundamental analysis of just a single stock can take hours or days. To then repeat that process, across multiple other analysis categories, means it could take years to analyze a single fund that’s composed of dozens of assets, to say nothing of the larger funds with hundreds or thousands of assets.

The deep analysis Fundwise enables, means that investors can access transparent information, both in the sense of seeing analysis of the entire fund, but also because Bridgewise analysis is based on clear, objective parameters. 

Easy-to-Understand Comparisons

One reason that it can be so difficult to find the right fund is that they can appear to be so similar. For example, there are 16 ETFs that track the S&P 500 index, and that’s just in the US alone, with more funds tracking the index available internationally.

Beyond that, there are many other funds that are based on similar indexes, making it difficult for retail investors to understand the differences and potential benefits of different funds. This can lead to a paradox of choice problem, in which the multitude of options prevent investors from making a choice.

Fundwise helps mitigate these issues with interactive, and easy to understand comparisons to leading benchmarks. Investors are able to look at specific metrics, expense ratio for example, and understand not just its value, but how it compares to other funds in the same category. If it’s high, low, attractive, or average, etc. Fundwise makes these comparisons accessible to a broad range of investors through visually engaging and interactive graphics that invite the user to explore further. It helps put meaning behind the numbers, enabling confident investor decision making. 

Strict Regulatory Compliance and Responsible AI Implementation

Of course, providing investment intelligence to investors and providing them with recommendations based on fund and ETF analysis requires strict regulatory compliance. This has been implemented at every level of Bridgewise’s solutions which are the foundation of Fundwise.

Beyond that, it is one of our core beliefs that bringing AI to the capital market requires a higher level of compliance. We believe that responsible AI is more important in finance than in most other industries. While other, general purpose AIs might offer false or “hallucinated” information, that can’t be allowed to happen when it comes to financial recommendations, and our solutions have been built from the ground up to meet these challenges with a specific focus on investment information.

With ETFs and other funds continuing to capture ever larger shares of investor assets and attention, clear and actionable insights are more important than ever and can help financial platforms boost investor confidence and decision making. To find out more about Fundwise and the way it can help your investors, sign up for a demo today.