Only New Zealand-domiciled fund managers qualify for inclusion in the awards, and only their retail unit trusts, superannuation funds, and group investment funds influence the outcome. A portfolio of eligible funds is created for each fund manager in each sector – called the fund manager's 'fund portfolio'. Detailed analysis is then conducted on these funds.

Winners are determined 70% by risk-adjusted medium- to long-term track record, and 30% by performance over calendar 2005.

Each fund manager's qualifying funds are included on an asset-weighted basis within each award category to form an overall 'fund portfolio'. The track record for a fund portfolio is derived from a combination of Morningstar's Risk-Adjusted Return measure over two time periods – three and five years. (Hence funds under three years old can't be rated.) The five-year period accounts for 60% and the three-year period for 40%. If only three years of data is available, the three-year figure alone is used. The one-year performance criterion for a fund portfolio is based on the asset-weighted average for the 2005 calendar year. The one-year performance ranking has not been risk-adjusted.