We understand this concern—and it’s a completely valid one. At IME Capital, our fund ratings are built around long-term potential, not short-term performance. A fund that continues to hold a high rating despite recent underperformance reflects our view that the current phase is temporary, and that the fund still retains all the right characteristics to deliver outperformance over time.

Our rating methodology—based on global best practices—combines both quantitative performance metrics and deep qualitative evaluation of the AMC’s pedigree, team depth, investment philosophy, and strategy execution. This comprehensive approach is designed to identify fund managers with a higher probability of delivering market-beating returns over a 3–5 year period, not those simply riding a short-term trend.

Even the best fund managers, much like the best athletes, can go through lean phases. A 1–2 year period of underperformance is not unusual and doesn’t by itself indicate anything broken in the fund. However, if at any point we believe something fundamentally has changed—in the strategy, the team, or the philosophy—that could impact long-term returns, the fund’s rating is promptly downgraded, and we flag that to our investors.

The takeaway? Fund performance must be assessed over a full cycle—at least 3 years or more. Short-term results, while sometimes frustrating, rarely reflect the full story. Our high conviction ratings are meant to help investors stay the course with the right managers through both good times and bad—because that’s how long-term wealth is built.