Absolute or relative: the dark side of fund rating systems

Academic literature and market practitioners have always devoted great attention to the analysis of asset management products, with particular regard to fund classification and performance metrics. Less attention has been paid to rating methodologies and to the risk of attributing positive ratings to underperforming asset managers. The most widespread rating criterion is the ordinal one, which is based on the assumption that the best asset managers are those who have performed better than their competitors regardless of their ability to achieve a given threshold (i.e. a positive overperformance against the benchmark). Our study, after a description of the most common risk-adjusted performance measures, introduces the idea of attributing the rating on a cardinal basis, setting in advance a given threshold that should be achieved to receive a positive evaluation (i.e. a rating equal to or higher than 3 on a scale of 1–5). The empirical test conducted on a sample of funds (belonging to the main equity and bond asset classes) made it possible to quantify the e®ects of the cardinal approach on the attribution of the rating and on the probability of assigning a good rating to underperforming funds. Empirical analysis also highlighted how the cardinal method allows, on average, better performance than the ordinal one even in an out-of-sample framework. The differences between the two methodologies are particularly remarkable in efficient markets such as the North American equity market. The two rating assignment systems were also analyzed using contingency tables to test the ability to anticipate the default event (underperformance relative to the benchmark). The policy suggestion emerging from our study concerns the significant impact of the rating criterion in reducing the risk of recommending funds that, despite a good rating, have failed to perform satisfactorily and are unlikely to do so in the future either

Experimental assessment and predictive model of the performance of Ti-based nanofluids

The need for innovative propulsion technologies (e.g., fuel cells) in the mobility sector is posing a higher-than-ever burden on thermal management. When low operative temperature shall be ensured, dissipation of a significant amount of heat is requested, together with limited temperature variation of the coolant; mobile applications also yield limitations in terms of space available for cooling subsystems. Nanofluids have recently become one of the most promising solutions to replace conventional coolants. However, the prediction of their effectiveness in terms of heat-transfer enhancement and required pumping power still appears a challenge, being limited by the lack of a general methodology that assesses them simultaneously in various flow regimes. To this end, an experiment was developed to compare a conventional coolant (ethylene glycol/water) and a TiO2-based nanofluid (1% particle loading), focusing on heat transfer and pressure loss. The experimental dataset was used as an input for a physical model based on two independent figures of merit, aiming at an a priori evaluation of the potential simultaneous gain in heat transfer and parasitic power. The model showed conditions of combined gain specifically for the laminar flow regime, whereas turbulent flows proved inherently associated to higher pumping power; overall, criteria are presented to evaluate nanofluid performance as compared to that of conventional coolants. The model is generally applicable to the design of cooling systems and emphasizes laminar flow regime as promising in conjunction with the use of nanofluids, proposing indices for a quantitative a priori evaluation and leading to an advancement with respect to an a posteriori assessment of their performance

Banking management game

Gioco di simulazione che consente di cimentarsi con la gestione di una banca in un ambiente competitivo adottando decisioni di price e non price competition finalizzate ad accrescere la quota di mercato e la redditività aziendale