Lipper awards: Vanguard the new victor

T. Rowe Price and American Funds clobber in target-date-fund categories.
FEB 27, 2018

In terms of pure weight, no fund company collected more iron at this year's Thomson Reuters Lipper Awards than The Vanguard Group. The Tuesday evening award ceremony in New York saw the Malvern, Pa.-based fund complex capture 29 trophies by 14 different mutual funds. The annual awards, which are based primarily on quantitative risk-adjusted performance over multiple time periods, place a tilted emphasis on funds that produce lower negative performance. "We are really paying attention to risk avoidance, because we know investors hate downside performance," said Tom Roseen, head of research services at Lipper. "We are looking at high risk-adjusted returns," he added. Vanguard funds earning high marks over the past year spread across multiple asset categories, and they leaned more heavily in various fixed-income categories. For instance, the $1.5 billion Vanguard Long-Term Treasury Index Fund (VLGIV) won for the 3- and 5-year return of the general U.S. government funds category. In the corporate bond fund category, the $16.5 billion Vanguard Long-Term Investment Grade Fund (VWETX), won for its performance over the 3-, 5-, and 10-year periods. (More: Full list of 2018 Lipper Fund Awards winners) Vanguard's total trophy count edged out Baltimore-based T. Rowe Price, which took home 26 trophies, awarded to 19 different funds. In T. Rowe's case, 15 of its winners were in target-date-fund categories for 3-, 5-, and 10-year periods. "This recognition is a testament to the strength of our global platform of portfolio managers and research analysts," said Rob Sharps, T. Rowe's group chief investment officer. The performance by T. Rowe ends a two-year winning streak by American Funds, which had dominated the trophy count for its solid performance in target-date-fund categories. At this year's ceremony, American Funds won nine awards, including six for the 5-year performance of target-date funds. Last year American Funds had 20 winners in target-date-fund categories, and has accumulated 65 trophies in target-date categories over the past five years. T. Rowe won 4 awards for target-date categories last year, and has been awarded 38 over the past five years. Combined, T. Rowe and American Funds have won 103 of the 133 trophies in target-date categories over the past five years. Boston-based Fidelity Investments finished third is the total trophy count for this year with 22 across 18 funds. In the overall fund family categories, TIAA Investments won the overall large-company award for the sixth consecutive year. Mr. Roseen explained that TIAA has kept its winning streak alive not by having the top funds in a lot of categories, but by having lots of top-quintile funds across multiple categories. In fact, just eight of the New York-based asset manager's funds won Lipper awards this year, all in target-date-fund categories. "TIAA's funds predominately out-paced their cohorts," Mr. Roseen said. "They may not have hit a lot of home runs, but they certainly hit a lot of triples." The same applies for TIAA's award for overall large-company winner in the mixed-assets category, which the company has won for the third straight year. TIAA Investments is the largest of 12 asset-management affiliates operating under Nuveen. Another one of those affiliates is Nuveen Asset Management, which ranked fourth among fund company winners with 18 awards, 16 of which were in municipal bond categories. "The name Nuveen has long been associated with municipal bond investing," said Vijay Advani, Nuveen chief executive officer. (More: Top funds honored by Lipper in 2017) "We are pleased that our expertise in this discipline continues to be recognized," he added. "What we are most excited about when it comes to winning these prestigious recognitions, is the opportunity we have to help advisers match the diverse needs of their clients with competitive solutions designed to achieve a wide range of financial goals." The line between large- and small-company categories for the overall winner awards is set this year at $75.3 billion in total assets under management. In the small-company category, the overall winner was Minneapolis-based Thrivent Funds for the third-consecutive year. David Royal, Thrivent chief investment officer, said the winning streak, "speaks to the dedication of our investment professionals." "At Thrivent, our philosophy is based on fundamental research and making selections we believe in over the long-term," he added. "We strive to be good stewards of the resources (investors) entrust to us."

Latest News

Cerulli: Advisors struggle to turn 401(k) savers into wealth clients
Cerulli: Advisors struggle to turn 401(k) savers into wealth clients

Just over 10% of advisors' wealth clients come from defined contribution plans, as capacity, data and technology gaps block the bridge to wealth

Alto to buy Forge Trust from Schwab in self-directed IRA push
Alto to buy Forge Trust from Schwab in self-directed IRA push

Deal creates a $20B-plus custody platform for private market investing in IRAs, months after Schwab closed its Forge Global purchase

Wall Street bonanza! The Street on track to hit a record $90 billion in profits: Report
Wall Street bonanza! The Street on track to hit a record $90 billion in profits: Report

Despite the good times, advisors should tread carefully, said one veteran industry executive.

Most workers have retirement plans but no retirement strategy
Most workers have retirement plans but no retirement strategy

Gallagher data reveals a huge gap in financial confidence between employees who work with an advisor and those who don't.

Small employers are more open to pooled retirement plans
Small employers are more open to pooled retirement plans

PEP assets hit $34bn at year-end 2025 as advisors navigate mandate deadlines and a 48% employer interest rate.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor