Fund Performance Review 2023

Since the year-end is the typical point in time at which investors review the performance of their portfolios, we want to shed a light on the Lipper global bond, equity, and mixed-assets classifications with the best and worst average performance. In addition, this report also showcases the performance of the best- and worst-performing funds/ETFs for each asset type and the average performance of the most relevant Lipper global classifications from a euro investor point of view for each asset type.

Methodology

In order to calculate the average performance of the funds and ETFs within the Lipper global classifications (LGCs) we used all bond, equity, and mixed-assets mutual funds and ETFs registered for sale in at least one country in Europe (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom). The calculations are not survivorship bias free since the calculation includes only funds and ETFs which have been launched before January 1, 2023.

The calculations are based on the results of the oldest available retail share classes, the so-called primary share class, of each fund and ETF.

The performance calculation is a total return calculation, which means that all dividends are included within the calculations.

All calculations are made in euro.

Overall, this study includes 30,719 funds and ETFs. The distribution per asset type is as follows:

Bond products n=7,549

Equity products n=12,781

Mixed-Assets products n=10,389

Lipper Global Bond Classifications

The 7,549 bond funds and ETFs were split into 91 Lipper global classifications at the end of December 2023. 86 of these classifications showed an average positive performance over the course of 2023, while only five classifications showed an average negative performance.

Funds and ETFs classified in the Bond HUF classification had the best average performance (+24.85%) over the course of the year 2023. The classification was followed by Bond BRL (+20.59%) and Bond PLN (+19.31%).

The best performing bond fund within this study had a return of 33.91% while the worst performing bond fund showed a performance of negative 50.69%.

Bond EUR High Yield (+9.95%) showed the best average performance for euro denominated bond classifications, followed by Bond EMU Government Long-Term (+8.16%), Bond EUR Corporates (+7.74%), Bond EUR Long-Term (+7.32%), and Bond EMU Government (+6.34%).

Graph 1: The Ten Lipper Global Bond Classifications with the Best and Worst Average Performance 2023 (in EUR)

Source: LSEG Lipper

The fact that nine out of the 10 best-performing bond classifications are based on foreign currencies showcase that the development of the base currencies of the funds and ETFs compared to the euro has a large impact on the positions of the single classifications in league tables. The same is true for the Lipper global classifications at the bottom of the table.

Lipper Global Equity Classifications

The 12,781 bond funds and ETFs were split into 124 Lipper global classifications at the end of December 2023. 105 of these classifications showed an average positive performance over the course of 2023, while 19 classifications showed an average negative performance.

Funds and ETFs classified in the Equity Poland Small- and Mid-Cap classification had the best average performance (+44.16%) over the course of the year 2023. The classification was followed by Equity Poland (+42.18%) and Equity Sector Information Technology (+42.05%).

The best-performing equity fund within this study had a return of 263.36% while the worst performing equity fund showed a performance of negative 68.56%. As for the performance of some technology stocks, it is no surprise that nine of the 10 best-performing funds and ETFs are investing in blockchain- and crypto-related technologies.

The broader classifications such as Equity US (+20.21%), Equity Japan (+14.76%), Equity Global (+14.30%), and Equity Europe (+13.70%) were all placed in the first quintile of the table. Equity Asia Pacific was the only broad plain vanilla classification which may have showed a disappointing average performance (+2.93%) from an investor’s point of view.

Graph 2: The 10 Lipper Global Equity Classifications with the Best and Worst Average Performance 2023 (in EUR)

Source: LSEG Lipper

With regard to the classifications at the top and the bottom of the table it is not surprising to see rather small or exotic classifications leading the table. The bottom of the table seems to be dominated by a shift in investor sentiment since the impact of the reopening of China after the end of the COVID measures did not match the expectations of investors. In addition, the uncertain situation within the Chinese real estate sector led to losses for equities in China.

Lipper Global Mixed-Assets Classifications

The 10,389 mixed-assets funds and ETFs were split into 71 Lipper global classifications at the end of December 2023. 64 of these classifications showed an average positive performance over the course of 2023, while only seven classifications showed an average negative performance.

Funds and ETFs classified in the Mixed Asset PLN Conservative classification had the best average performance (+25.88%) over the course of the year 2023. The classification was followed by Mixed Asset PLN Balanced (+24.84%) and Mixed Asset CAD Flexible (+17.66%).

The best-performing mixed-assets fund within this study had a return of 104.09% while the worst performing mixed-assets fund showed a performance of negative 63.48%.

Euro investors who want to diversify their portfolio as wide as possible by investing in global mixed-asset products witnessed that the average performance of the respective classifications: Mixed Asset EUR Aggressive – Global (+10.68%), Mixed Asset EUR Flexible – Global (+8.15%), Mixed Asset EUR Balanced – Global (+8.14%), and Mixed Asset EUR Conservative – Global (+6.28%) were in line with their risk profiles.

Graph 3: The Ten Lipper Global Mixed-Assets Classifications with the Best and Worst Average Performance 2023 (in EUR)

Source: LSEG Lipper

The fact that nine out of the 10 best-performing mixed-assets classifications are based on foreign currencies showcases that the development of the base currencies of the funds and ETFs compared to the euro has a large impact on the positions of the single classifications in league tables. The same is true for the Lipper global mixed-assets classifications at the bottom of the table.