Rankings of financial products are obviously as old as financial products themselves, but things tipped about fifteen years ago, as the boss of a property asset manager describes:
“Surprisingly, one asset manager that leads the market today was winning prizes in the 2010s but sometimes didn’t bother to collect them, so it never talked about them. They seem to have changed their minds.”
Indeed, in recent years most winners have put out, at the very least, a LinkedIn post, a blog article or a newsletter about their prizes. It builds the brand, pleases the fund manager and the investors, and above all reassures prospects.
Still, nobody (internally) is fooled about what they’re really worth, and the trophies usually end up gathering dust on a cabinet in the marketing or fund management department.
According to another asset management boss, there are 3 types of prizes, ranked by methodology, from the flimsiest to the most solid:
“Prizes from wealth advisers, prizes handed out by juries (but who are these people?), prizes from newspaper editorial teams.”
Wealth advisers, known in France as CGPs1, inevitably have a big conflict of interest. Given that the vast majority of them are paid only through commissions passed back to them by fund managers, their advice, opinions and rankings are largely remote-controlled. Many sources mention lobbying campaigns (gentle ones, but very real).
Juries are often more independent, but very mixed. Sometimes they’re journalists, sometimes industry pros. But when you see journalists who specialise in personal wealth talking about “fee-free SCPIs” (SCPIs being French non-listed property funds) to mean vehicles with no entry fee, or that head of a wealth desk to whom a fund manager had to explain the difference between TOP and TOF2 even though she had sat on a jury herself, the legitimacy and methodology of these juries are open to question.
As for the media, their rankings vary widely, with methodologies that are sometimes debatable, sometimes non-existent, but often more solid. Several professionals named the rankings of Le Revenu, a French personal finance magazine, as probably the best made.
Hindsight is always twenty-twenty, of course, but it’s still interesting to see what the rankings said at the time and how they may have misled savers.
Take La Centrale des SCPI, a distribution platform. Its 2021 ranking3 was just a list based on 2020 yields. That’s a pretty poor indicator, but since new SCPIs have much higher yields (both because they need to raise money and because they can deploy small amounts more easily), it works well enough. But in 2022, the ranking gets broader. In it you find PF Hospitalité Europe, as a challenger in healthcare, but above all Eurovalys and Novapierre Allemagne, all of which saw significant falls in 2023. The same PF Hospitalité was still in the 2023 ranking published at the end of 20224, less than a year before a 9.5% drop.
And while the drop was made official in September 2023, the valuations had taken place over the summer and followed a rise in interest rates that had been going on for more than a year. Well before the publication of a ranking that clearly hadn’t taken any of it into account. Nor the quality of the property portfolio.
These rankings (which you’ll find on MeilleureSCPI5, France SCPI6 and elsewhere) aren’t worth much, since nobody really knows their methodology, and they seem mostly driven by yield. You can only be surprised that SCPI professionals don’t explain at greater length that yield isn’t the only indicator to look at. Nor even, although it’s a legal requirement, that it is no reliable indicator of future performance.
But browse the websites of these same distributors and you’ll find other league tables, far more intriguing.