by Detlef Glow.
On January 31 approximately 200 participants from the Swiss and international fund industries celebrated the twenty-eighth annual Thomson Reuters Lipper Fund Awards for Switzerland, held in the prestigious AURA Festsaal 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 Thilo Schreyer, Business Manager Switzerland and Liechtenstein at Thomson Reuters; Jan Giller, Partner and Head of Marketing and Sales at Fundinfo; 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.
Our guests seemed to enjoy interesting conversations with their peers and music and food after the awards ceremony. The event was covered by our media partner Fundplat.
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 award periods. Instead, the 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 Thomson Reuters Lipper Fund Awards ceremony in Zurich honored 20 single funds from the largest peer groups by assets under management in the Swiss fund universe. 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.
PS CH-Swiss High Dividend-P CHF won the Lipper Fund Award for the Equity Switzerland category over the three- and five-year periods, while BB Entrepreneur Switzerland won for the ten-year period.
Equity Switzerland Small- and Mid-Cap
CS (CH) Small Cap Switzerland Equity Fund A was named the Lipper Fund Award winner for Equity Switzerland Small- and Mid-Cap over the three-year period, while BGF Swiss Small & MidCap Opp A2 CHF won the award for the five-year period. Pictet CH-Swiss Mid Small Cap-P dy CHF won for the ten-year period.
The best asset management groups in Switzerland
The group awards are divided into those for 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 once again T Rowe Price, which outperformed 36 competitors in this category. The best large bond fund manager was once again BlackRock, which beat 55 competitors in its category.
Quaero Capital outperformed its 83 opponents and was named the best small asset manager in the equity segment. First State won the trophy as the best large asset manager of equity funds, beating 57 competitors in terms of consistent outperformance.
There were 30 large asset managers and 32 small asset managers competing for the Lipper Fund Awards in the mixed-asset segment. The Swiss asset manager PostFinance won the trophy for the best small manager, and the award for the best large manager went to the German asset manager Flossbach von Storch.
The highlight of the evening was the presentation of the overall awards. The winning groups were able to show 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. Banque Syz won the award for the best small fund management group, while Fidelity 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.