Lipper Indexes

What Are Lipper Indexes?

Lipper Indexes are indexes that track the financial performance of different types of managed fund strategies. Each index is based on the performance of the largest publicly traded funds in the strategy group.

Key Takeaways

  • Lipper indexes are benchmarks for actively-managed mutual fund performance, across a range of fund strategies and asset classes,
  • Depending on the particular strategy, anywhere from 30 to 100 individual funds are used to gauge the index's performance.
  • Lipper indexes have become common as a reference when reporting fund performance to investors and analysts.

Understanding Lipper Indexes

Lipper Indexes are constructed and managed by Lipper which is owned by Reuters. Lipper manages indexes for nearly every type of mutual fund strategy in the investable market. Public disclosure of Lipper Index performance is provided by the Wall Street Journal and by Barron’s.

To construct each index, Lipper averages the returns of funds in the investable market that are managed to the Index’s strategy. Funds used for index return calculations are chosen by assets under management. The number of funds used by Lipper to obtain Lipper Index performance varies broadly. Most Lipper Indexes use approximately 30 to 100 funds to obtain index performance.

Lipper Indexes are often included in mutual fund performance reporting. Investment managers may use Lipper and Lipper Index data in reporting for their clients. A Lipper Index may also be used as a mutual fund’s primary benchmark.

Lipper Index Analysis

Lipper Indexes can help give retail investors insight into the best performing strategies as well as the performance of various strategies throughout different market timeframes. Through this webpage, Lipper provides investors with information on the best and worst-performing indexes across market categories.

One-year Lipper Index returns through July 24, 2021, show the Lipper Upright Growth Fund as the top-performing strategy in the global equity category. This strategy reports a one-year return of 168.7%. Meanwhile, the worst-performing global equity strategy over the past year has been the Lipper SGA International Equity Fund, with a one-year return of -82.02%. It should be noted that performance data changes every year, and that new funds may be created or older funds cease to operate over time.

In the bond market, the Lipper UBS FI Enhanced Global High Yield is the top-performing strategy with a one-year return of 24.17%. The worst performing strategy in the bond market over the past year has been the Lipper Intermediate US Government Index. This strategy has a one-year return of -0.87%.

In the money market category, Lipper Index returns ranged from 0.2% to 0.01% over the one-year period through Jan. 5, 2018. The top-performing index was the Lipper Transamerica Government Money Market Fund with a return of 0.2%. The worst performing fund in the category was the Lipper Legg Mason Partners Premium Money Market Trust with a return of 0.01%

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