by Detlef Glow.
On February 2 approximately 200 participants from the Swiss and international fund industries celebrated the twenty-seventh annual Lipper Fund Awards for Switzerland, held in the prestigious Metropol in Zurich. This awards event is the kick-off every year for Lipper’s global awards program. Since the event also marks the beginning of the annual Swiss awards season, it gets a lot of attention from the asset management industry as well as from the media.
The speakers at the event were Axel Jester, Head of Europe East at Thomson Reuters; Indira Tasan, Editor in Chief at BANCO; Otto Christian Kober, Global Head of Methodology at Lipper; and Detlef Glow, Head of EMEA Research at Lipper. The speakers all provided market insights and much food for thought to the attendees.
Our guests seemed to enjoy interesting conversations with their peers while they enjoyed live music and food after the awards ceremony. The event was covered by our media partners—BANCO and e-fundresearch—which published pictures and results from the ceremony after the event.
Different methodologies lead to different results
Contrary to what a number of market observers would expect, the Lipper Fund Awards are not based only on return numbers; the winners of a Lipper Fund Award aren’t determined by looking at the funds with the highest returns over the respective awards periods. In actuality, the Lipper Fund Awards are based on the Lipper Leader ratings for Consistent Return; they are calculated using a utility function based on the effective return over multiple non-overlapping periods—three-, five-, and ten-year horizons. The calculations over multiple periods ensure that all periods in which a fund underperforms the average of its peer group are identified. Then, Lipper uses a utility function based on behavioral finance theory to penalize periods of underperfomance against the peer group average, with more significant weightings being given to excess negative returns.
From an investor point of view the calculation methodology ensures that the winners of the Lipper Fund Awards are funds that have provided relatively superior consistency and risk-adjusted returns compared to a group of similar funds. Therefore, funds that receive a Lipper Fund Award may be the best fit for investors who value a fund’s year-to-year consistency relative to other funds in a particular peer group.
The best mutual funds in Switzerland
The Lipper Fund Awards ceremony in Zurich honored 20 single funds from the largest peer groups in the Swiss fund universe by assets under management. In addition, there were 69 funds that won an award for the three-year period, although they didn’t receive a trophy on stage. Also, 82 funds were recognized with a Lipper Fund Award over the five-year period, and 51 funds won the prestigious trophy for the ten-year period.
Swissquote Quant-Swiss Equities CHF A won the Lipper Fund Award for the Equity Switzerland category over the three-year period, while CS Select Fund (CH) Swiss Equities 130/30 B won once again for the five-year period. In addition, Raiffeisen Futura Swiss Stock A won once again for the ten-year period.
Equity Switzerland Small- and Mid-Cap
BGF Swiss Small & MidCap Opp A2 CHF was named the Lipper Fund Award winner for Equity Switzerland Small- and Mid-Cap over the three- and five-year periods, while Mirabaud Equities Swiss Small and Mid-A Cap-CHF once again won the award for the ten-year period.
The best asset management groups in Switzerland
The group awards are divided into large and small management groups, based on a regional assets-under-management split. It is not enough for a fund management company to hold just one large fund. A large management group must have at least five equity, five bond, and three mixed-asset portfolios, while a small group must have at least three equity, three bond, and three mixed-asset portfolios.
Within the bond segment the best small asset manager was T Rowe Price, which outperformed 32 competitors in this category. The best large bond fund manager was once again BlackRock, which beat 53 competitors in its category.
The London-based Seilern outperformed its 87 opponents and was named the best small asset manager in the equity segment. The French Comgest won the trophy as the best large asset manager of equity funds, beating 60 competitors in terms of consistent outperformance.
There were 29 large asset managers and 28 small asset managers competing for the Lipper Fund Awards in the mixed-asset segment. While the German Flossbach von Storch won the trophy for the best small manager, the award for the best large manager went to the U.S.-based asset manager Fidelity.
The highlight of the evening was the presentation of the overall awards. The winning groups were able to show an above-average risk-adjusted performance within their bond, equity, and mixed-asset products. In this category there were 24 large groups and 10 small groups competing for the prestigious trophy. Raiffeisen Schweiz won the award for the best small fund management group, while BlackRock was named the best large fund management group.
As one can see from the number of fund management groups in the single categories, the Lipper Fund Awards are exceedingly competitive and recognize the fund managers that are setting benchmarks within the industry. The Awards commemorate the expertise of the collective funds management industry and the individual funds’ ability to outperform the market.