March 23, 2020

Refinitiv Lipper Fund Awards 2020 – Shine Like a Diamond in Vienna

by Detlef Glow.

The celebration of the Refinitiv Lipper Fund Awards in Vienna was held on March 9 in the prestigious Park Hyatt Hotel, located in the historic former headquarters of the Bank Austria. The awards ceremony in Austria was the second event in the German-speaking markets (Austria, Germany, and Switzerland) and was visited by around 70 participants from the Austrian and international fund industries.

Johann (Hansi) Leikert, Sales Director CEE/CIS at Refinitiv, and Mario Franzin, Editor in Chief at 4profit Verlag GmbH, welcomed the guests, while Dr. Anatol Eschelmüller, Project Manager at 4profit Verlag, moderated the evening. Detlef Glow, Head of Lipper EMEA Research at Refinitiv, gave a presentation on the European fund flows in 2019 and presented the Refinitiv Lipper Fund Awards.

Mag. Wolfgang Pinner, CIO Sustainable & Responsible Investment at Raiffeisen Capital, and member of the board of the FNG (the social investment forum for the German speaking markets), gave the keynote speech. His presentation was focused on the integration of ESG criteria in investment processes.

Guests seemed to enjoy engaging in interesting conversations with peers while they networked and enjoyed drinks and food after the awards ceremony. The event was covered in the print issue of Geld Magazin, published by our event media partner 4profit Verlag GmbH (Click here to see all pictures from the event in Vienna).

Different methodologies lead to different results

Contrary to what a number of market observers would expect, the Refinitiv Lipper Fund Awards are not based on return numbers only. The winners of a Refinitiv Lipper Fund Award aren’t determined by looking at the funds with the highest returns over the respective award period. In actuality, the Refinitiv Lipper Fund Awards are based on the Lipper Leader rating for Consistent Return. These ratings are calculated using a utility function based on the effective return over multiple non-overlapping periods—within the respective three-, five-, and 10-year horizons.

The calculations over multiple periods ensure 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 the periods of underperformance 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 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.

Market overview

One-tenth of the size of Germany’s, the Austrian funds industry is dominated by foreign asset managers. Currently worth €86.1 billion, it experienced flows of €1.5 billion euro during 2019, including international funds domiciled outside of Austria yet managed by an Austrian fund management company. Funds domiciled within Austria held assets of €85.4 billion euro during the year, and underwent inflows of €1.7 billion euro. This means that the international domiciled funds managed by Austrian fund managers experienced outflows.

The best mutual funds in Austria

The Lipper Fund Awards ceremony in Vienna honored the 20 single funds from the largest peer groups in the Austrian 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, 84 funds were recognized with a Refinitiv Lipper Fund Award over the five-year period, and 63 funds won the prestigious trophy for the 10-year period (Click here to see a list of all winners of a Refinitiv Lipper Fund Award in Austria).

The best asset management groups in Austria

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 again Lord, Abbett & Co., which outperformed 29 competitors in this category. The best large bond fund manager was MFS, which beat 56 competitors in its category.

Seilern outperformed its 65 competitors and was named the best small asset manager in the equity segment. Investec won the trophy as the best large asset manager of equity funds, beating 68 competitors in terms of consistent outperformance.

There were 35 large asset managers and 42 small asset managers competing for the Lipper Fund Awards in the mixed-asset segment. While the Swiss Rock won the trophy for the best small manager, the award for the best large manager went once again 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 an above-average risk-adjusted performance within their bond, equity, and mixed-asset products. In this category, there were 30 large groups and 15 small groups competing for the prestigious trophy. The Austrian asset manager C-Quadrat won the award for the best small fund management group, while the U.S. asset manager MFS 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 fund management industry and the individual funds’ ability to outperform the market.

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