On May 15, 2024, LSEG Lipper unveiled the results of the LSEG Lipper Fund Awards for Islamic funds globally. Like previous years, the awards ceremony was not held as a physical in-person event.
Since the last six years were a very challenging period for fund managers globally, the LSEG 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 one of the prestigious LSEG Lipper Fund Awards in 2024.
Different methodologies lead to different results
Contrary to what a number of market observers would expect, the LSEG Lipper Fund Awards are not based on return numbers alone. The winners of an LSEG Lipper Fund Award aren’t determined by looking at the funds with the highest returns over the respective awards periods. In actuality, 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 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 LSEG 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 an 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.
In contrast to the awards for single countries—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 Global Islamic Fund Awards is composed of all funds globally which are flagged as shariah compliant within the Lipper database.
A document outlining the full methodology for the LSEG Lipper Fund Awards can be found here.
The best Islamic mutual funds globally
There were 414 mutual funds eligible for a LSEG Lipper Fund Award Global Islamic. 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 36 funds that won an award for the three-year period. Also, 36 funds were recognized with a Lipper Fund Award over the five-year period, and 31 funds won the prestigious trophy for the 10-year period. The complete lists of the winning funds can be found on our awards website.
Equity Global
Old Mutual Global Islamic Equity Fund Class B Accumulation won again the LSEG Lipper Fund Award for the Equity Global category over the three-year period, while HSBC Islamic Funds – HSBC Islamic Global Equity Index AD again won the LSEG Lipper Fund Award for the Equity Global category over the five- and 10-year periods.
Graph 1: Old Mutual Global Islamic Equity Fund Class B Accumulation vs Lipper Global Equity Global 01.01.2021 – 31.12.2023 (in %)
Calculation Currency: EUR
Source; LSEG Lipper
The best asset management groups for Islamic funds globally
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 Global Islamic Awards 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.
Given the low number of eligible funds for the LSEG Lipper Fund Awards Global Islamic 2024, it is not surprising that there are only two group awards winners.
Within the bond segment, the best asset manager was Principal, which outperformed four competitors in this category.
For the equity segment, BNP Paribas outperformed its 28 opponents and was named the best asset manager in the equity segment.
The LSEG Lipper Fund Awards are recognizing 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 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 Refinitiv 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.
About LSEG Lipper Fund Awards:
For more than 30 years and in over 17 countries worldwide, the highly respected LSEG 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.
