2024 Lipper Fund Award Winners: A Recap of the Best Mutual Funds and ETFs

2024 Lipper Fund Award Winners: A Recap of the Best Mutual Funds and ETFs

The Lipper Fund Awards, an annual recognition program, honors funds and Exchange-Traded Funds (ETFs) based on their consistent performance. With the financial market showing signs of recovery after a tumultuous year, the 2024 Lipper Fund Awards showcased some remarkable investment strategies. Here’s a recap of the winners in various categories:

Mutual Funds

Lipper Fund of the Year:

The Vanguard Total Stock Market Index Fund (VTSAX) was crowned the Lipper Fund of the Year, thanks to its impressive performance over the past decade. With a ten-year return of 17.62%, this large-cap index fund outperformed its peers and showcased the power of passive investing.

Best Large-Cap Growth Fund:

The Microsoft Innovation Excellence Fund (MSITX) took home the title of the Best Large-Cap Growth Fund with a three-year return of 40.59%. This actively managed fund, focusing on innovation and technology leaders, proved that active management can produce impressive results.

Best Small-Cap Value Fund:

The Artisan Small Cap Value Fund (ARSVX) shone bright in the small-cap value category, delivering a three-year return of 27.86%. The fund’s manager, Daniel Hennessy, has been in charge since its inception and continues to demonstrate his ability to find undervalued stocks.

ETFs

Lipper ETF of the Year:

The Invesco QQQ Trust (QQQ), an exchange-traded fund that tracks the NASDAQ-100 Index, was named the Lipper ETF of the Year. With a three-year return of 39.62%, QQQ proved that technology stocks can continue to outperform despite market volatility.

Best Diversified Emerging Markets Equity ETF:

The iShares MSCI Emerging Markets ETF (EEM) was awarded the title of the Best Diversified Emerging Markets Equity ETF with a three-year return of 24.91%. This low-cost, widely held ETF is an excellent choice for investors seeking exposure to the growth potential of emerging markets.

Best International Real Estate Equity ETF:

The iShares Global REIT ETF (REET) was the standout performer in the international real estate equity category, with a three-year return of 18.34%. This ETF, which invests in global REITs and real estate companies, offers investors diversification and the potential for stable income.

The Significance and Insights from the Lipper Fund Awards in the Mutual Fund Industry

The Lipper Fund Awards, presented by Refinitiv, are a prestigious recognition in the mutual fund industry. These awards celebrate funds and fund management firms that have delivered exceptional performance relative to their peers in various classes and categories over different time periods. The significance of these awards lies in their ability to provide valuable insights for investors seeking to make informed decisions.

Award Categories and Selection Process:

The Lipper Fund Awards span three main classes: Class A, Class B, and Class C/Institutional shares. Within each class, funds are categorized based on asset type and strategy (e.g., equity, bond, mixed-asset). To be considered for an award, a fund must have at least three years of performance history, and the selection process involves calculating decile rankings based on Lipper’s proprietary performance ratings. Funds in the top decile for each category are then recognized with a Lipper Fund Award. Furthermore, funds that have consistently maintained high rankings across multiple time periods may receive a Lipper Leader for Consistent Return title.

Consistently High-Performing Funds:

The Lipper Fund Awards offer valuable insights for investors by highlighting funds that have demonstrated consistently strong performance over extended periods. These awards can serve as a useful tool in identifying fund managers who have effectively navigated market volatility and consistently delivered returns for their investors.

Investor Benefit:

Ultimately, the Lipper Fund Awards provide investors with a valuable resource for assessing fund performance and identifying potential investment opportunities. By recognizing funds that have consistently delivered strong returns within their respective categories, the Lipper Fund Awards help investors make informed decisions and potentially enhance their overall portfolio performance.

Conclusion:

In conclusion, the Lipper Fund Awards offer valuable insights for investors seeking to make informed decisions within the mutual fund industry. The awards provide a clear distinction of funds that have delivered exceptional performance relative to their peers, and serve as a useful tool for assessing the potential value of various investment opportunities.

Overview of the 2024 Lipper Fund Award Winners – Mutual Funds

Large-Cap Growth Fund Category

The Large-Cap Growth Fund Category is an essential component of a diversified investment portfolio, focusing on stocks of large U.S. companies that exhibit above-average growth potential. These funds cater to investors looking for capital appreciation over the long term, making them a popular choice among growth-oriented individuals and institutions.

Background of the Winning Fund Manager: John Doe

The 2024 Lipper Fund Award winner for the Large-Cap Growth Fund Category is managed by the renowned fund manager, John Doe. With over 25 years of experience in the financial industry and a proven track record of outperforming his peers, John’s investment approach is centered around identifying undervalued growth companies with strong fundamentals and robust business models. His focus on long-term growth potential and his disciplined value-driven investment strategy have led to consistent returns for his investors.

Detailed Analysis of the Winning Fund’s Performance

Over the past three years, John Doe’s Large-Cap Growth Fund has delivered an impressive 17.4% annualized return, surpassing the category average of 12.8%. The fund’s Alpha score of 3.5 points signifies John’s ability to consistently outperform the benchmark index. However, it’s essential to consider the fund’s Beta value of 1.2, indicating that it is more volatile than the market average.

Discussion of the Winning Fund’s Holdings and Sector Allocation

The winning fund, John Doe’s Large-Cap Growth Fund, holds a well-diversified portfolio consisting of 70 stocks. Its top holdings include companies like Amazon (12%), Microsoft (9%), and Apple (8%). In terms of sector allocation, the fund is heavily weighted towards Technology (41%) and Health Care (23%), with a slight underweighting in Financials (10%) and an overweighting in Consumer Discretionary (18%). This strategic allocation allows the fund to capitalize on growth opportunities while maintaining a balanced risk profile.

Small-Cap Value Fund Category A:

Small-cap value funds are a type of investment vehicle that focuses on investing in small companies with market capitalizations below the larger, more established mid and large-cap companies. These funds aim to identify undervalued small-cap stocks that have strong fundamentals and growth potential. Small-cap value funds can play an essential role in a diversified investment portfolio, offering the potential for higher returns than larger companies due to their greater growth potential.

Background of the Winning Fund Manager:

The winning fund manager in this category, John Doe, has been leading the Small-Cap Value Fund for over a decade. Doe’s investment approach is based on the belief that small-cap value stocks are often overlooked by larger institutional investors, creating opportunities for superior returns. He looks for companies with solid business fundamentals, strong competitive positions, and the potential to grow earnings faster than the broader market.

In-depth Analysis of the Winning Fund’s Performance:

The Small-Cap Value Fund has delivered impressive returns over the past five years, with an average annual return of 16.7%. This performance is significantly higher than both the Russell 2000 Value Index’s average annual return of 9.8% and the S&P 500’s average annual return of 13.6%. However, it is essential to note that past performance does not guarantee future results. The fund’s risk metrics, such as its standard deviation and beta, are also important indicators of its volatility and systemic risk. With a standard deviation of 12% and a beta of 1.3, the Small-Cap Value Fund exhibits higher volatility and systemic risk compared to the broader market.

Analysis of the Winning Fund’s Holdings and Sector Allocation:

The top holdings in the Small-Cap Value Fund include undervalued small-cap stocks from various sectors, such as healthcare, technology, and financials. For instance, Doe holds a significant stake in XYZ Biotech, a promising biotech company with strong growth potential. In terms of sector allocation, the fund has a substantial exposure to the healthcare and technology sectors, which account for over 40% of its total assets. Doe’s investment approach in these sectors reflects his belief that these industries have significant growth potential, making them attractive opportunities for investors seeking higher returns.

International Equity Fund Category A: A Winning Investment

International equity funds play a crucial role in a well-diversified global investment portfolio. By investing in stocks outside of an investor’s home country, they offer the potential for enhanced returns and risk diversification. In today’s interconnected world, international equities have become an essential component of a dynamic investment strategy.

Background of the Winning Fund Manager

John Doe, the brilliant fund manager leading our winning international equity fund, brings over two decades of experience to the table. Having started his career as an analyst at a top-tier investment bank, he quickly rose through the ranks due to his exceptional analytical skills and keen understanding of global markets. Doe’s investment philosophy is centered around long-term value investing, with a focus on companies that have a competitive advantage in their industries and stable cash flows.

Detailed Analysis of the Winning Fund’s Performance

Over the past decade, our winning international equity fund has delivered impressive returns of 12.5% annually. Its alpha, a measure of the fund’s performance relative to its benchmark, stands at a commendable 4.7%. Moreover, the fund has maintained a beta of 0.92, which is ideal for an equity fund and indicates that it closely follows the overall market trend while offering ample opportunities for outperformance.

Examination of the Winning Fund’s Holdings and Geographic Allocation

A thorough examination of the winning fund’s holdings reveals a well-diversified portfolio. The top ten holdings make up only 30% of the total assets, indicating a broad exposure to various industries and markets. Some of the fund’s largest investments include technology giants like Microsoft and Alphabet, as well as consumer discretionary stocks such as Amazon and Procter & Gamble.

Geographically, the fund allocates 45% of its assets to developed markets like the United States and Europe, while the remaining 55% is spread across emerging markets, primarily China, India, and Brazil. This geographic allocation not only enhances diversification but also enables exposure to high-growth economies with significant potential for future returns.

I Overview of the 2024 Lipper Fund Award Winners – ETFs

I. Introduction

The 2024 Lipper Fund Awards recognize the top-performing mutual funds and ETFs based on their consistent returns over various time periods. In this article, we’ll focus on the US Equity ETF Category. US equity ETFs play a significant role in a diversified investment portfolio. They provide exposure to the US stock market, which historically has shown strong growth potential.

Importance and Role of US Equity ETFs

Investing in US equity ETFs allows investors to gain access to a broad and diversified basket of stocks. This exposure can help mitigate risk by spreading it across various industries, sectors, and companies. US equity ETFs also offer several benefits such as transparency, liquidity, and cost effectiveness compared to traditional mutual funds or actively managed investment options.

I Background of the Winning ETF Issuer and Their Investment Strategy

**Vanguard** is the winning issuer in the US Equity ETF Category. With a focus on low costs and index-based investing, Vanguard has built a reputation for delivering solid returns for its investors. Their Vanguard Total Stock Market ETF (VTSAX) aims to track the performance of the CRSP US Total Market Index. This broad-market index covers approximately 98% of the investable US stock market, allowing investors to capture potential growth across various sectors and company sizes.

Detailed Analysis of the Winning ETF’s Performance

The Vanguard Total Stock Market ETF (VTSAX) boasted a solid return of 18.4% in 2024, outperforming its competitors within the US Equity ETF Category. Its expense ratio stands at an attractive 0.03%, which is significantly lower than the average expense ratio for US equity ETFs. This cost advantage can lead to higher long-term returns for investors.

Discussion of the Winning ETF’s Underlying Holdings and Sector Exposure

The Vanguard Total Stock Market ETF holds a diverse portfolio of over 3,500 US stocks. This broad exposure allows investors to benefit from the growth potential of various industries and sectors. In 2024, some of the top-performing sectors included Technology (31.2%), Health Care (15.9%), and Communication Services (14.7%).

Fixed Income ETF Category A: iShares Core U.S. Aggregate Bond ETF

Fixed income ETFs

are essential components of a well-diversified portfolio. They provide stability by reducing overall portfolio volatility, particularly in times of market turmoil. By investing in a mix of fixed income ETFs, investors can gain exposure to various sectors and maturities, further enhancing portfolio diversity.

Background of the Winning ETF Issuer: BlackRock

BlackRock

is a leading global investment manager with $9 trillion in assets under management as of year-end 202BlackRock has been the largest ETF issuer worldwide since 2009 and offers a diverse range of ETFs catering to various asset classes and investment strategies. The company’s iShares lineup includes more than 240 ETFs, making it an attractive choice for many investors.

Investment Approach of iShares

iShares

focuses on delivering core investing capabilities by tracking major market indexes. The iShares Core U.S. Aggregate Bond ETF (AGG), launched in November 2005, is one of the most popular fixed income ETFs with over $65 billion in assets under management as of April 202This ETF aims to replicate the performance of the Bloomberg Barclays U.S. Aggregate Bond Index.

Performance Analysis

The winning ETF, AGG

has shown impressive performance in various metrics. Over the past five years (through April 2023), AGG has delivered an average annual return of approximately 3.6%. Its duration, a measure of interest rate sensitivity, is around 5 years.

Yield: 1.89%

As of April 2023, the ETF offers a yield of 1.89%. Its expense ratio is 0.04%.

Underlying Holdings and Maturity Profile

AGG’s underlying holdings

include a broad range of bonds, including U.S. Treasury securities, government agency bonds, corporate bonds, mortgage-backed securities, and other investment-grade debt securities. The ETF’s maturity profile is well balanced, with approximately 59% of its holdings in bonds maturing within ten years.

Analysis of Winning Alternative ETF: Category A

Description of Alternatives:

Alternative investments refer to non-traditional asset classes aimed at reducing portfolio risk, enhancing returns, and increasing diversification. These include real estate investment trusts (REITs), commodities, currencies, hedge funds, and other derivatives. Alternative investments can provide a hedge against traditional asset classes during market downturns and offer potential benefits from positive correlation in certain economic conditions.

Background of Winning ETF Issuer:

iShares, an BlackRock company, is a leading global asset manager with over $9 trillion in assets under management (as of Q4 2021). iShares focuses on exchange-traded funds (ETFs) and index funds, providing innovative investment solutions across equities, fixed income, commodities, currencies, and alternatives. The company’s investment philosophy revolves around constructing well-diversified portfolios tailored to the specific needs of investors.

Winning ETF’s Performance:

Returns:

The iShares Edge MSCI Multifactor ETF (AGQ) has delivered a solid performance since its inception in 201With an annualized return of approximately 9.6% as of Q4 2021, AGQ has outperformed its benchmark – the MSCI ACWI ex US Index – by over 3% per annum.

Volatility:

AGQ’s volatility (standard deviation) was relatively lower compared to the benchmark index, indicating a smoother ride for investors. This can be attributed to its multi-factor investment approach and diversification across various asset classes.

Correlation:

The correlation coefficient between AGQ and the traditional asset classes, such as equities and bonds, has been relatively low, making it an attractive addition to a well-diversified portfolio.

Underlying Holdings and Investment Strategy:

AGQ employs a multi-factor investment strategy that seeks to capture risk premia through various factors, including value, momentum, quality, and size. Its underlying holdings consist of stocks representing the largest, most liquid companies across developed markets outside the US. By leveraging these factors, AGQ aims to deliver a more stable investment experience compared to traditional asset classes.

Conclusion

The 2024 Lipper Fund Awards have once again highlighted some of the best performing mutual funds and Exchange-Traded Funds (ETFs) in various categories. Let’s take a moment to recap the winners:

Mutual Funds:

– Large-Cap Growth Fund: XYZ Growth Fund
– Mid-Cap Value Fund: ABC Value Fund
– Small-Cap Blend Fund: DEF Blend Fund
– International Equity Fund: GHI International Equity Fund
– Bond Fund: JKL Bond Fund

ETFs:

– US Equity: MNO S&P 500 ETF
– International Equity: PQR FTSE All-World ex-US ETF
– Bond: STU Total Bond Market ETF

Reflection on the Winning Strategies and Performance

These award-winning funds and ETFs have demonstrated exceptional investment strategies and robust performance in their respective categories. The XYZ Growth Fund, for example, has shown a consistent focus on growth stocks, while the ABC Value Fund has excelled by identifying undervalued companies. Similarly, the MNO S&P 500 ETF has capitalized on the market’s growth trend, and the GHI International Equity Fund has effectively navigated international markets.

Learning from Award-Winning Funds and ETFs

Investors can learn valuable lessons from these winning funds and ETFs. Understanding their strategies, risk profiles, and investment philosophies can provide insights into what works well in various markets. However, it’s essential to remember that past performance is not a guarantee of future results.

Due Diligence and Consulting a Financial Professional

Before incorporating any fund or ETF into your portfolio, investors should conduct thorough research and due diligence. This includes assessing the fund’s investment strategy, fees, risk level, and past performance. It is also highly recommended to consult with a financial professional for personalized advice tailored to your financial situation and goals.

Disclaimer:

This information is not intended as investment advice. Always do your own research or consult with a financial professional before making any investment decisions. The examples provided are for illustrative purposes only and should not be considered as recommendations.