| NEW YORK, March 21
NEW YORK, March 21 As the broader market shifted
between fear and exuberance, the winners of the 2014 U.S. Lipper
Fund Awards managed to strike a balance and delivered consistent
Trophies were handed out to the managers of the 37
top-performing mutual funds for the past three years ended Nov.
30 that faced stretches of market turbulence. They contended
with a bond market selloff, a sharp rise in stocks following the
U.S. Federal Reserve's easy money policies, a rout in emerging
market assets, unprecedented stimulus from the Bank of Japan and
a partial shutdown of the U.S. government.
In this 12th year of the awards, Lipper, a unit of Thomson
Reuters Corp , Lipper recognized 107 fund
families. The awards were officially presented in New York City
on March 20.
In a conversation with Reuters, Tom Roseen, Lipper's head of
research services in Denver, and Jeff Tjornehoj, Lipper's head
of Americas research, explained how the awards can help
investors recognize the rare fund that performs well over time.
Q: What is the most important factor for picking winning
funds or firms?
Roseen: We don't need to have the best performance. The best
performance can add that extra risk that you and I are perhaps
not willing to absorb. It's not only consistent or persistent
performance, but consistent over long periods of time.
Tjornehoj: No one is a favorite here. We don't send this
through a jury. This is done strictly based on our model for
producing the best consistent return over three, five, and 10
years. The consistency is critical.
Q: Was there a common trait among this year's trophy
Roseen: These were the ones that were able to mitigate
losses better than their peers in poor-performing
classifications and showed persistence in their strong
performance over longer time periods. It's really finding that
gem in the weeds.
Tjornehoj: The only thing we can say is that all of these
managers have seen market volatility decline substantially in
the past three years. Certainly, the bond fund managers had to
deal with a little lumpier ride than equities, but relative to
what was going on five or six years ago, the waters are far
Q: Which trophy winners stood out to you?
Roseen: MassMutual Retirement Services did very well. They
ended up having the best mixed asset and the best overall small
group. At last year's fund awards, they actually did very well
in the mixed asset group, taking a trophy home, but this is the
first time they have taken home both the best overall small fund
group and the best mixed assets small fund group awards.
Many investors don't think of the old insurance companies as
glamorous fund shops, but certainly (MassMutual) did a great job
changing that opinion.
Tjornehoj: The Delaware Extended Duration Bond Fund
has been a stellar performer for several years now. It
swept its category, and it has done that for the last four years
over three-, five-, and 10-year periods.
TIAA-CREF is winning the overall large company award for the
second year in a row. TIAA-CREF has a very sharp eye for
reducing expenses where they can, so that shareholder-friendly
management style should get notice.
Q: What enables the repeat winners to do consistently well?
Roseen: They stuck to their knitting. The TCW Total Return
Bond Fund, for 2010 and 2014, won the three-, five-,
and 10-year categories, and then in 2012 to 2013 they won the
five- and the 10-year groups. They maintained their investment
focus and weren't concerned about chasing performance.
Tjornehoj: They each have a different approach, but overall
it comes down to being risk-savvy. Downside volatility is
punished four times heavier than upside is rewarded.
Q: What else strikes you about this year's winners?
Roseen: Dimensional Fund Advisors' DFA Intermediate
Government Fixed Income Portfolio... that fund has
shown up as a repeat winner at the 10-year mark. There are funds
that actually show a propensity to continue to add to their
Tjornehoj: Our model is not stuck in the past. While we have
a fair number of repeat winners here, the model is able to show
that some firms and their funds are rising ahead, so it's not
just the same group getting a trophy year after year.
Q: What should an investor in these funds expect?
Roseen: These are not the home-run hitters. These are the
guys that are driving doubles for us and will get us on base and
will hopefully get us into scoring position. We're into risk
avoidance. These are the types of funds that would fit better in
our portfolios and probably let us sleep.
(Reporting by Sam Forgione; Editing by Lauren Young and Jeffrey