The 16th annual Lipper Fund Awards for the United States has taken place in New York, celebrating the best funds and fund management firms and providing an opportunity for the industry to share market views.
- The Lipper Fund Awards honor funds and fund management firms for excellence in providing consistently strong risk-adjusted performance relative to their peers.
- Michael Kushma, CIO of Global Fixed Income at Morgan Stanley Investment Management, discussed how investors can prepare for interest rate uncertainty.
- Nuveen’s TIAA Investments wins the U.S. Overall Funds Award, beating 33 other fund companies to secure the title for the sixth straight year.
In over 20 countries worldwide, the Lipper Fund Awards honor funds and fund management firms that excel in providing consistently strong risk-adjusted performance relative to their peers.
Renowned fund data and proprietary methodology is the foundation of the award qualification, but the awards are not just about recognizing the industry’s top performers.
The events are also an opportunity to network, discuss market trends and, in the case of the United States ceremony, test the guests’ knowledge of pop music.
Some 200 asset and wealth management luminaries, experts and influencers, fund managers, advisors and fund distribution professionals were present for the U.S. awards event at the Mandarin Oriental Hotel in New York City.
Prior to the awards, we wasted no time in finding out their views on the outlook for the fund management industry in 2018. Overall, they were cautiously optimistic.
2018 market outlook
Predictions ranged from an uptick in volatility to the return of active mutual funds. While tax reform and interest-rate hikes have altered growth predictions, the shared outlook is a strong year-end finish with big opportunities for investors.
Some of their predictions:
- Short-term asset-backed securities will continue to be best-performing sector, outperforming U.S. Treasuries.
- Volatility is temporary, and the market will move forward on tax reform, deregulation and strong corporate earnings.
- Higher interest rates and inflation are a headwind for the markets, but not catastrophically so.
To kick off the awards ceremony, I spoke to Michael Kushma, CIO of Global Fixed Income at Morgan Stanley Investment Management, in a keynote interview entitled Fixed Income at a Crossroads: The R* Wars. The R* is used by economists to refer to real interest rates.
Since inflation does not appear to be a big concern, employment is strong and the U.S. Federal Reserve is gradually nudging interest rates higher at a measured pace, it seems like there is not a lot for investors to worry about right now.
But there is no clear roadmap for rate hikes and mistakes can happen, Kushma said. Morgan Stanley is using qualitative and quantitative data to ensure investors do not get stuck in a fixed-income quagmire.
Lipper Fund Awards honor top performers
The Lipper Fund Awards recognize funds and fund management firms for consistently strong risk-adjusted three, five, and/or ten-year performance relative to their peers.
Eight group awards, including the coveted Overall Award, were given to firms with superior asset class performance.
To keep the evening interesting for the whole audience, each award was accompanied by a well-known song and guests were asked to post their guesses on Twitter with the hashtag #TRMusicContest.
In addition to individual fund classification awards, Fund Family Awards were presented to qualified firms from each asset class and group with the lowest average decile rank of the three-year Consistent Return measures of the eligible funds.
Fund Family Award winners in attendance were honored for the following awards:
- Nuveen’s TIAA Investments won both the Best Overall Funds and the Best Mixed-Asset Funds Awards for a Large Fund Company. TIAA beat 33 other fund companies to take home the Best Overall trophy for the sixth straight year. It also finished first among 35 fund companies for its third consecutive victory in the Best Mixed-Asset Funds category. TIAA captured eight individual awards this year, including two trophies, all for mixed-asset fund classifications.
- The Best Overall Funds Award for a Small Fund Company this year went to Thrivent Mutual Funds. This was the third consecutive year Thrivent has won the top prize in this category. It did so by outperforming 29 other fund companies that qualified for the award. Thrivent also took home two individual awards this year, including one trophy.
- PRIMECAP Management Company won the Best Equity Funds Award for a Small Fund Company this year for the third consecutive year. PRIMECAP, which has approximately US$27.3 billion in assets under management, outdistanced just over 200 other small fund companies for this year’s award.
- Morgan Stanley Investment Management captured the Best Fixed Income Funds Award for a Large Fund Company for the second straight year. Morgan Stanley finished first among 39 fund companies in the category this year on the strength of seven individual awards, including three trophies, in fixed income fund classifications.
- Ashmore Funds won its first-ever fund family award this year — in the Best Fixed Income Funds for a Small Fund Company category. Ashmore, with just shy of $2 billion in assets under management, ranked number one among 79 fund companies that qualified in this category. Ashmore also captured an individual award this year in the Emerging Markets Hard Currency Debt Funds classification.
- Allianz Global Investors won the Best Mixed-Asset Funds Award for a Small Fund Company category this year. Allianz, which has roughly $25.6 billion in assets under management, beat 47 other small fund companies to take the prize.