fundsthat

Fundsthat is a term used in investment discourse to describe a class of investment vehicles that operate according to explicit, predefined criteria for selecting underlying assets. Rather than being tied to a single strategy, fundsthat encompass a family of funds that apply rules-based filters to decide which securities to include or exclude, aiming to deliver clearly stated investment objectives.

The concept emerged as fund managers and investors sought more transparency and repeatability in selection processes. Fundsthat often sit between traditional active management and purely passive indexing, incorporating systematic or rules-based elements. They may resemble smart beta, factor investing, or thematic approaches, but the defining feature is the use of auditable criteria to guide inclusion, exclusion, and weighting.

Structure and mechanisms vary, but fundsthat are typically organized as pooled vehicles such as mutual funds or exchange-traded funds. They rely on screening, scoring, or optimization rules that can be simple or complex. The rules are designed to be transparent to investors, with performance driven by the quality and stability of inputs, as well as the clarity and robustness of the criteria. Fees tend to reflect the level of methodological effort and governance.

Examples of fundsthat include equity funds that screen for specific fundamentals or ESG attributes, fixed-income funds that emphasize liquidity and credit quality, and multi-asset funds that balance risk according to a predefined budget. Thematic fundsthat target technologies or macro trends can also fall into this category, provided they adhere to explicit criteria.

Critics argue that fundsthat may suffer from overfitting, data quality issues, and evolving criteria that complicate comparability. Proponents emphasize transparency, replicability, and potential for customizable risk management. Regulatory treatment typically centers on disclosure and performance attribution.

See also: factor investing, ESG investing, smart beta, thematic investing, investment criteria disclosure.