by Detlef Glow.
On February 11 approximately 200 participants from the Austrian and international fund industries celebrated the eleventh annual Lipper Fund Awards for Austria, held in the “Haus der Industrie” in Vienna. This awards event was the second event in the European awards series for Lipper’s global awards program. The event was hosted by the print magazine GELD MAGAZIN and e-fundresearch.com. Since it was the first physical Lipper Fund Award ceremony after a break of five years, the event got a lot of attention from the asset management industry in Austria. The speakers at the event were Snezana Jovic, Managing Director at 4profit Verlag GmbH; Mag. Albert Reiter, CFA, Managing Director, e-fundresearch.com Data GmbH; Thomas Steinbauer, Partner at PwC; and Detlef Glow, Head of EMEA Research at Thomson Reuters Lipper. All provided the attendees many market insights and a lot of food for thought.
After the awards ceremony the guests participated in interesting conversations with their peers while they enjoyed Austrian cuisine, music, and drinks until late. The hosts covered the event either in print or by publishing a report and pictures on the Internet.
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 returns; the winners of a Lipper Fund Award aren’t determined by looking at the funds with the highest returns over the 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’s 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 Austria
The Lipper Fund Awards ceremony in Vienna honored 20 single funds from the largest peer groups in the Austrian fund universe by assets under management. In addition, there were 65 funds that won an award for the three-year period, although they didn’t receive a trophy on stage. Also, 73 funds were recognized with a Lipper Fund Award over the five-year period, and 53 funds won the prestigious trophy for the ten-year period.
3 Banken Oesterreich-Fonds won the Lipper Fund Award for the Equity Austria category over the three-, five-, and ten-year periods.
The best asset management groups in Austria
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 38 competitors in this category. The best large bond fund manager was BlackRock, which beat 46 competitors in its category.
London-based Seilern outperformed its 66 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 53 competitors in terms of consistent outperformance.
There were 24 large asset managers and 50 small asset managers competing for the Lipper Fund Awards in the mixed-asset segment. While the German Union Investment won the trophy for the best small manager, the award for the best large manager went to the Germany-based asset manager Allianz Global Investors.
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 73 large groups and 48 small groups competing for the prestigious trophy. Austria-based Kepler 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 notoriously 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.