Hulbert Rating

DEFINITION of 'Hulbert Rating'

A ranking system that tracks the performance of investment newsletters over time. The Hulbert rating system creates theoretical portfolios based on the buy and sell advice of each newsletter and then tracks their risk-adjusted returns over time. Newsletters that perform the best on a risk-adjusted basis are given the highest ratings, while those that underperform are given lower ratings.

BREAKING DOWN 'Hulbert Rating'

The Hulbert rating system was the first system used to objectively evaluate the recommendations of investment newsletters. The rating system has found several newsletters that have outperformed the market over considerable periods, although most underperform. This result roughly matches with academic work that has found that the majority of actively managed mutual funds underperform the market. Yet a small percentage that outperform over longer time periods remains. Whether this outperformance is due to good luck or superior skill is a matter of debate.

RELATED TERMS
  1. Benchmark

    A standard against which the performance of a security, mutual ...
  2. Management Tenure

    The length of time that a manager(s) has been at the helm of ...
  3. Active Investing

    An investment strategy involving ongoing buying and selling actions ...
  4. Efficient Market Hypothesis - EMH

    An investment theory that states it is impossible to "beat the ...
  5. Active Management

    The use of a human element, such as a single manager, co-managers ...
  6. IRR Rule

    A measure for evaluating whether to proceed with a project or ...
Related Articles
  1. Technical Indicators

    Investors Intelligence Sentiment Index

    This indicator can give a overall sense of bull and bear forces - learn what it is and how it's constructed.
  2. Investing Basics

    Evaluating Paid Investing Newsletters

    Investopedia explains: There are many different newsletters available, and investors must decide which is most appropriate for their investing style.
  3. Mutual Funds & ETFs

    How To Pick A Good Mutual Fund

    Learn how to evaluate mutual funds and find the right one for you.
  4. Active Trading

    The Benefits Of An Investment Club

    Don't want to be a passive investor? Discover how investment clubs allow you to take control of your portfolio.
  5. Mutual Funds & ETFs

    Pick The Winners At The Mutual Fund Track!

    For both mutual funds and racehorses, there's no surefire way to pick a winner.
  6. Products and Investments

    There's a Reason They're Called Junk Bonds

    The closing of Third Avenue Managemet's Focused Credit Fund is a warning to investors and advisors. Beware the junk.
  7. Mutual Funds & ETFs

    Top 3 PIMCO Funds for Retirement Diversification in 2016

    Explore analyses of the top three PIMCO funds for 2016 and learn how these funds can be used to create a diversified retirement portfolio.
  8. Mutual Funds & ETFs

    The 3 Best Downside Protection Equity Mutual Funds

    Learn how it is possible to profit in a bear market by owning the correct selection of mutual funds that provide downside protection and opportunity.
  9. Mutual Funds & ETFs

    The 4 Best Lord Abbett Mutual Funds

    Discover the four best mutual funds administered and managed by Lord, Abbett & Co., LLC that offer investors a wide variety of investment strategies.
  10. Mutual Funds & ETFs

    The ABCs of Mutual Fund Classes

    There are three main mutual fund classes, and each charges fees in a different way.
RELATED FAQS
  1. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  2. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  3. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  4. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  5. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
  6. What is the formula for calculating earnings per share (EPS)?

    Earnings per share (EPS) is the portion of a company’s profit that is allocated to each outstanding share of common stock, ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center