by Detlef Glow.
On April 21, 2022, Refinitiv Lipper unveiled the results of the Refinitiv Lipper Fund Awards for the Nordic countries in conjunction with our media partner Expert Investor. Unlike previous years, physical in-person events won’t be held globally due to Covid-19 pandemic restrictions.
Since 2021 was another challenging year for the global fund industry, the Refinitiv Lipper Fund Awards will get a lot of attention from the asset management industry since these awards showcase the ability of a fund to deliver high risk-adjusted returns.
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 alone. The winners of a Refinitiv Lipper Fund Award aren’t determined by looking at the funds with the highest returns over the respective awards periods. 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 that all periods in which a fund underperforms the average of its peer group are identified. Then, Refinitiv Lipper uses a utility function based on behavioral finance theory to penalize periods of underperformance against the peer group average.
From an investor point of view, the calculation methodology ensures that the winners of the Refinitiv 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 Refinitiv 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.
In contrast to the single country awards, where all funds from the eligible asset classes with a sales registration in the respective country are taken into consideration, the fund universe for the Nordic fund awards is composed of funds which are registered for sale in at least one of the Nordic countries (Denmark, Finland, Norway, and Sweden).
A document outlining the full methodology for the Refinitiv Lipper Fund Awards can be found here.
The best mutual funds in the Nordics
There were 3,717 mutual funds eligible for a Refinitiv Lipper Fund Award in the Nordics. Out of this fund universe, the fund awards honor those funds which had the highest score in the Lipper Leader rating for Consistent Return over the three-, five-, and 10-year periods. Overall, there were 89 funds that won an award for the three-year period. Also, 87 funds were recognized with a Lipper Fund Award over the five-year period, and 65 funds won the prestigious trophy for the 10-year period. The complete lists of the winning funds can be found on our awards website.
Lannebo Norden Hallbar A won the Lipper Fund Award for the Equity Nordic category over the three-year period, while I&T Aktier KL won over the five-year period, and SEB Nordic Equity Fund C (EUR) won over the 10-year period.
Graph 1: Lannebo Norden Hallbar A vs Lipper Global Equity Nordic 01.01.2019 – 31.12.2021 (in %)
Calculation Currency: EUR
Source; Refinitiv Lipper
Equity Nordic Small- and Mid-Cap
Aktia Nordic Micro Cap B was named the Lipper Fund Award winner for Equity Nordic Small- and Mid-Cap over the three- and five-year periods, while EVLI Finnish Small Cap B was tops over the 10-year period.
Graph 2: Aktia Nordic Micro Cap B vs Lipper Global Equity Nordic Small- and Mid-Cap 01.01.2019 – 31.12.2021 (in %)
Calculation Currency: EUR
Source; Refinitiv Lipper
The best asset management groups in the Nordics
The group awards are divided into those for large and small asset 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 asset management group must have at least five equity, five bond, and three mixed-assets portfolios, while a small group must have at least three equity, three bond, and three mixed-assets portfolios. The complete lists of the winning asset management groups can be found on our awards website.
Within the bond segment, the best small asset manager was PGIM Investments, which outperformed 27 competitors in this category. The award for the best large bond fund manager was won by Nykredit Invest, which beat 52 competitors in its category.
PGIM Investments also outperformed 81 competitors and was named the best small asset manager in the equity segment. Union Bancaire Privee won the trophy as the best large asset manager of equity funds, beating 65 competitors in terms of consistent outperformance.
There were 32 large asset managers and eight small asset managers competing for the Lipper Fund Awards in the mixed-assets segment. While Alexandria won the trophy for the best small manager, the award for the best large manager went to GAM.
The winning groups for the overall awards were able to show an above-average risk-adjusted performance within their bond, equity, and mixed-assets products. In this category, there were 45 large groups and 24 small groups competing for the prestigious trophy. Ohman won the award for the best small fund management group, while Goldman Sachs 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.
The views expressed are the views of the author and not necessarily those of Refinitiv. This material is provided as market commentary and for educational purposes only and does not constitute investment research or advice. Refinitiv cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. Please consult with a qualified professional for financial advice.
The Refinitiv Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers.
The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60, and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the Refinitiv Lipper Fund Award. For more information, see lipperfundawards.com. Although Refinitiv Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Refinitiv Lipper.
About Refinitiv Lipper Fund Awards:
For more than 30 years and in over 17 countries worldwide, the highly respected Refinitiv Lipper Awards have honored funds and fund management firms that have excelled in providing consistently strong risk-adjusted performance relative to their peers and focus the investment world on top funds. The merit of the winners is based on entirely objective, quantitative criteria. This, coupled with the unmatched depth of fund data, results in a unique level of prestige and ensures the award has lasting value. Renowned fund data and proprietary methodology is the foundation of this prestigious award qualification, recognizing excellence in fund management. Find out more at www.lipperfundawards.com.