On 24 April 2024, we unveiled the results of the LSEG Lipper Fund Awards for the UK.
In this challenging year for the global fund industry, the LSEG Lipper Fund Awards showcases the ability of fund managers to deliver high risk-adjusted returns, over a year fraught with so many risks.
The past five years have been challenging for all investors. Starting with the market turmoil in Q4 2018, the COVID-19 pandemic with lockdowns, disrupted delivery chains, quantitative easing measures taken by central banks around the globe, followed by quantitative tightening, and wide-ranging geopolitical uncertainty, such as the war in Ukraine. The high inflation rates which caused a complete turnaround of central bank policies were another challenge, especially within the bond sector. This means the winners of the LSEG Lipper Fund Awards 2024 had to weather multiple storms which were hitting the capital markets to achieve an outstanding risk-adjusted return which qualified them to become a winner for their respective Lipper global classifications over three, five, or 10 years.
Different methodologies lead to different results
While the LSEG Lipper Fund Awards are entirely quantitative, this should not be understood in the sense of raw return numbers alone—award winners aren’t determined by picking the funds with the highest returns over the respective awards periods.
The LSEG 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, LSEG Lipper uses a utility function based on behavioural finance theory to penalize periods of underperfomance against the peer group average, with more significant weightings being given to excess losses.
This calculation methodology ensures that the winners are funds that have provided superior consistency and risk-adjusted returns, compared to similar funds. We believe this is more in line with how investors view financial gain and loss, meaning that funds receiving a LSEG 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 the UK
The LSEG Lipper Fund Awards recognised 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 85 funds that won an award for the three-year period. Some 80 funds were also recognised with a Lipper Fund Award over the five-year period, and 62 funds won the prestigious trophy for the 10-year period. The complete lists of the winning funds can be found on our awards website here.
Equity UK
Invesco UK Opportunities Fund (UK) Accumulation was the winner of the Equity UK award over three years, with the Artemis UK Select Fund Class R Acc coming first over five, and Royal London Sustainable Leaders Trust taking the top slot over ten.
Equity UK Small- and Mid-Cap
WS Gresham House UK Multi Cap Income Fund C Sterling Accumulation was named the Lipper Fund Award winner for Equity UK Small- and Mid-Cap over three-years, with VT Teviot UK Smaller Companies Fund winning over five-year periods, while Liontrust UK Smaller Companies Fund R Inc won over the 10-year period, as it did the previous year.
Bond GBP
Bond flows have rebounded over the year, and the Edentree Responsible and Sustainable Sterling Bond won the award for this category over three years.
The best asset management groups in the UK
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. 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 Principal, which outperformed 19 competitors in this category. The best large bond fund manager was Candriam, which topped a list of 48.
Alken beat 79 others to be named the best small asset manager in the equity segment, while Northern Trust won the trophy as the best large equity asset manager, beating 59 competitors in terms of consistent outperformance.
There were 52 and 54 asset managers competing for the Lipper Fund Awards for large and small classifications respectively in the mixed-asset segment. While AJ Bell won the trophy for the best small manager, the award for the best large manager went to Artemis.
The winning group for the overall award was able to show an above-average risk-adjusted performance within its bond, equity, and mixed-asset products. This award was scooped up by Jupiter for large manager, with best overall small manager being Barclays.
As you can see from the number of fund management groups in each category, the Lipper Fund Awards are exceedingly competitive and recognise 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.
LSEG Lipper data covers more than 360,000 share classes in more than 80 countries. The Lipper Leader ratings are available for mutual funds registered for sale in 47 markets. Find out more.
The views expressed are the views of the author and not necessarily those of LSEG. This material is provided as market commentary and for educational purposes only and does not constitute investment research or advice. LSEG 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.
Disclaimer
The LSEG 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 LSEG 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 LSEG Lipper Fund Award. For more information, see lipperfundawards.com Although LSEG Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by LSEG Lipper.
