by Detlef Glow.
On May 17, 2023, Refinitiv Lipper unveiled the results of the Refinitiv Lipper Fund Awards for the MENA Markets. Like previous years, the awards ceremony was not held as a physical in-person event.
Since the last five years were a very challenging period for fund managers globally, the Refinitiv Lipper Fund Awards will get a lot of attention from the asset management industry since only those managers who were able to adapt their portfolios permanently to new market environments will receive a Refinitiv Lipper Fund Award in 2023.
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 fund awards for the MENA markets is composed of all mutual funds with a sales registration in at least one of the following MENA market countries: Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, and the United Arab Emirates.
A document outlining the full methodology for the Refinitiv Lipper Fund Awards can be found here.
The best mutual funds in the MENA markets
There were 784 mutual funds eligible for a Refinitiv Lipper Fund Award in the MENA markets. Out of the respective 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 40 funds that won an award for the three-year period. Also, 38 funds were recognized with a Lipper Fund Award over the five-year period, and 35 funds won the prestigious trophy for the 10-year period. The complete lists of the winning funds can be found on our awards website.
GIB Opportunistic MENA Equity Fund C won the Lipper Fund Award for the Equity MENA category over the three-year period, while Jadwa Arab Markets Equity Fund – Class B again won the Lipper Fund Award for the Equity MENA category over the five- and 10-year periods.
Graph 1: GIB Opportunistic MENA Equity Fund C vs Lipper Global Equity MENA 01.01.2020 – 31.12.2022 (in %)
Calculation Currency: EUR
Source; Refinitiv Lipper
Equity GCC (Gulf Cooperation Council)
Al Rajhi GCC Equity Fund was once again named the Lipper Fund Award winner for Equity GCC (Gulf Cooperation Council) over the three- and five-year periods, while Jadwa GCC Equity Fund – Class B was once again named as winner for the 10-year period.
Graph 2: Al Rajhi GCC Equity Fund vs Lipper Global Equity GCC (Gulf Cooperation Council) 01.01.2020 – 31.12.2022 (in %)
Calculation Currency: EUR
Source; Refinitiv Lipper
The best asset management groups in the MENA markets
As opposed to other awards where the group awards are divided into those for large and small asset management groups based on a regional assets-under-management split, the awards for the MENA markets region do not make a distinction between large and small groups. To be eligible for an asset class group award, the groups will need to have at least three distinct portfolios in one of the asset classes: equity, bond, or mixed assets. To be eligible for an overall group award, the groups will need to have at least three equity, three bond, and three mixed-assets funds. The complete lists of the winning asset management groups can be found on our awards website.
Within the bond segment, the best asset manager was once again Societe Tunisienne De Banque, which outperformed 28 competitors in this category.
For the equity segment, there were two asset managers named as winners of a Refinitiv Lipper Fund Award. Alistihmar Capital and Jadwa Investment outperformed their 48 opponents and were named the best asset managers in the equity segment.
SNB Capital outperformed its eleven competitors and won once again the Lipper Fund Awards in the mixed-assets segment.
CDG Capital Gestion, the winning group for the overall award, was able to show an above-average risk-adjusted performance within its bond, equity, and mixed-assets products, competing against 10 other groups.
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.
In addition, winners for the domestic Arabian markets, as well as Islamic funds globally were also awarded for their outstanding performance. View the 2023 domestic Arabian markets winners and the Global Islamic winners on our awards website.
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.