MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, October 17, 2001 Lipper Focuses on Individual Investor Today, in New York City, Lipper held a press conference for a new series of tools for individual investors. These tools are called Lipper Leaders and are designed to help investors determine what mutual funds are right for them. In part, this a service available to the individual free via the Internet. "This is a service we have had in the works for about 18 months," Robin Thurston, vice president and director of research for the firm, told the assembled group of reporters at the Bryant Park Hotel. "For us, this is a new push into the intermediary and individual investor arena. It is our belief that current offerings miss the mark with apples-to-oranges comparisons." Lipper Leaders measures equity, mixed equity, and fixed income investment vehicles. Money markets are not a part of the calculations. The two leader tools now available include the Lipper Leaders for Consistent Return and for Preservation. Other tools are in the works for a first quarter 2002 release. One such tool will be a Lipper Leader for Tax Efficiency. "Investors define consistency as the smoothness -- a lack of chop -- of the fund over time. They define return as the risk adjusted framework using Effective Return. These two elements are combined together, and those in the top quintile (ranked 1 through 5) are named Lipper Leaders," explained Andrew Clark, research analyst. "For Preservation, investors are looking to preserve capital regardless of a variety of market conditions. Obviously, downside volatility is more important than upside volatility because no one likes to lose money. We utilize the most recent 36 months of activity to measure performance. And again, those in the top quintile are named Lipper Leaders," Clark continued. Classifications for the Lipper Leader for Preservation are based purely on broad asset class. The Lipper Leader for Consistent Return refines that to more specific allocation strategies (i.e. equity income funds, large-cap core funds, etc.). "This is certainly a tool that financial advisors can use when helping their clients. They can determine what kind of investor their client is and use these new tools to help find the right vehicles for that client in creating a strong diversified portfolio," Clark contended. Thurston noted that there were a couple of surprising preservation leaders -- because of the sectors they represent -- including: MFS International New Discovery Fund (MIDAX), DFA International Small Cap Value Fund (DISVX), and Vanguard Healthcare Fund. These three funds can be viewed by following this link. He also noted that 25% of Fidelity's family were Lipper Leaders, 35% for Vanguard and T. Rowe Price, and approximately 70% for Thornburg. "A fund with consistent return is not necessarily a 5-star fund. They are different stories, different strategies," Thurston added. He also added that no one measure will stand alone. A number of different measures are needed to help truly judge the best mutual fund for a given individual investor. Lipper's latest move puts it toe-to-toe with some other firms that are already in the business of providing analytical tools and other assistance to individual investors. Lipper could find itself in direct competition from a range of companies from Morningstar to The Motley Fool. The battle to win the hearts and minds of individual investors has just gotten that much more interesting. Printed from: MFWire.com/story.asp?s=27048 Copyright 2001, InvestmentWires, Inc. All Rights Reserved |