Whether you manage a mutual fund or are responsible for investing employee retirement funds, the Lipper rating can be a valuable investigative tool. The Lipper rating advice gives you commentary, analytic tools and information on most any mutual or hedge fund in the market today. A high Lipper rating instills the confidence that the fund is a worthwhile investment. If you are a fund manager, a high rating conveys to prospective investors that their money is safe in your fund.

There are measures that you as a fund manager can take to obtain a high Lipper rating. As a business investor, the Lipper rating advice, commentary and information provides a benchmark that you can use to grow company assets. Either way, there are some items to consider before investing in a fund or making material asset alterations to an existing fund:

1. Investigate the Lipper rating methodology to determine the qualifications.

2. Compare the Lipper rating of a fund to other services ratings.

3. Contact a Lipper rating consultant or the service directly.

Action Steps
The best contacts and resources to help you get it done

Enroll in the Lipper rating training course

In order to understand how and why financial funds rank high on the Lipper rating scale, it's necessary to know the specifics of the ranking methodology. In other words, how many years does a fund need to be existence to obtain a rating and what returns are necessary for a lofty rating.

I recommend: Register for an online or live training session for more help with Lipper rating service software. Use the Lipper fund screener available through Reuters to determine which funds receive high ratings. Examine the methodologies and definitions section of the MarketWatch website to understand how they rate funds.

Contrast the Lipper rating information to others

A ratings service is only as good as its performance against it peers and the overall market in general. Without a means of comparison, you would have no idea just how well the highly rated funds by Lipper performed over a lengthy period of time.

I recommend: Use the fund screener available from Evergreen Investments that allows you to compare Lipper and Morningstar fund ratings. Study the Lipper and Morningstar comparison tutorial available at the Well Fargo Advantage website.

Call a Lipper ratings representative

When you thoroughly understand how the Lipper ratings service works, then you can make the informed decision of whether to purchase the service. If you are a fund manager, you can also contact the service directly to begin the rating request process.

I recommend: Submit a service request form to a sales representative through the Lipper information website. Register to become a member of Hedgeworld, which has inside access to Lipper ratings and a discount on their services.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Before you enroll in Lipper rating service or any for that matter, the user must have a sound understanding of financial markets. Otherwise, your business will not be able to maximize the utility of the service.