What is Mercer Viewpoint?
- A high level qualitative review of a fund, based on a manager’s response to a questionnaire
- The questionnaire covers the Mercer four factors – Idea Generation, Portfolio Construction, Implementation, and Business Management
- Questionnaires are scored based on pre-defined criteria
- Designations signify the level of issues and risks identified, categorizing the strategy as warranting merit, observation or caution. See example below:
It is suitable for clients who:
- Have a large numbers of funds
- Require a base level of investment due diligence
- Require frequent reviews of large numbers of funds
- Are seeking to rationalise large fund ranges
- Have limited due diligence resources
- Are looking for more involved screens than performance analysis provides.
How can it help you?
- The output from the process is the assignment of warranting merit, observation or caution
- It is assigned to each of the four factors as well as to the fund
- Indicates the level of potential issues which have been identified with the fund
- Aids in prioritising funds for deeper due diligence
- Can be used to rationalise fund ranges (e.g. funds which are unlikely to be highly rated following deeper due diligence can be removed with some rationale for doing so)
- Cost effective and time efficient screening for high volumes of strategies
- Warrants merit does not indicate a recommendation by Mercer, simply that the number of issues and risks identified is low
- The designation is not an indication of the likelihood of outperformance.
Four factor framework underpins our research