Lipper Leaders Rating System

Different people have different perception of success.  What is important to you or how you define success differs from your neigbour.  Similarly your investment goals differs from your neigbours.

This key idea is the foundation for the  Leader Rating Systems developed by Lipper’s Global Research team to help guide investors and their advisors in selecting funds that suit individual investment styles and goals. 

The Rating System is a toolkit that uses investor-centered criteria to deliver a simple, clear description of a fund's success in meeting certain goals, such as preserving capital, lowering expenses or building wealth. The Ratings provide an instant measure of a fund’s success against a specific set of key metrics. These metrics can be used alone or in combination to build individualized portfolios that suit an investor’s particular goals. Two main metrics are Consistent Return and Capital Preservation and Total Return.

The ratings are subject to change every month and are calculated for the following time periods: 3-year, 5-year, 10-year, and overall. The overall calculation is based on an equal-weighted average of percentile ranks for the Consistent Return metrics over 3-year, 5-year, and 10-year periods (if applicable). The highest 20% of funds in each classification are named Lipper Leaders for Consistent Return. The next 20% receive a rating of 4; the middle 20% are rated 3; the next 20% are rated 2, and the lowest 20% are rated 1.

Refer articles below to learn more about each metric.