S&P VOLLEYS IN STAR WARS

Standard & Poor’s Corp. has unveiled new mutual fund ratings it hopes will take some of the shine off Morningstar’s star system.

S&P’s Select Fund Evaluation Service first looks at such standard quantitative measures as risk-adjusted and absolute returns. Funds are analyzed by sector and ranked by three-year performance. The next step — this is the hook — is qualitative, focusing on fund managers, who are interviewed by a team of S&P analysts.

The result: What Sanford Bragg, managing director of New York-based S&P’s global mutual fund business, calls “a more manageable list. Less than 10% of funds will be awarded the Select rating. It’s exclusive and it’s meant to be.”

Just 24 funds made the debut Select list — of large-cap growth funds. A look at the winners shows the somewhat subjective nature of the list. Among them: $181 million Accessor Growth Portfolio, a low-profile quantitative fund, the $500 million Vintage Equity Fund, a Midwest regional product, and the much ballyhooed Janus Twenty Fund.

Skipped over were Fidelity Dividend Growth (S&P officials say Fidelity wouldn’t agree to its monthly reporting requirement), T. Rowe Price Blue Chip Growth and Gabelli Growth, all of which earned higher marks on the rating firm’s quantitative screens than some funds that did make the list.

S&P will mail the Select lists free to 34,000 fee-only financial planners and will weigh subscription costs around Labor Day.

Small-cap growth funds and mid-cap growth funds are up next. Lists will be updated semiannually.

S&P’s competitors say it’s too soon to grade the new rating system. But a spokesman for San Francisco-based Charles Schwab Corp., which offers its own mutual fund Select List, says, “Imitation is the sincerest form of flattery.”