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Portfolio > Mutual Funds > Equity Funds

Lipper Gets Into the Game

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Lipper Inc., which historically geared its efforts toward institutional clients, unveiled last month a new Web site,, in hopes of attracting more individual investors and investment advisors to its product line. “We are pretty well known on the institutional side of the business,” says Lipper research analyst Jeff Tjornehoj, “so to reinvigorate the brand we really needed to provide tools so that individuals and advisors will recognize our name and other products.”

To differentiate itself from the Morningstars and S&Ps of the world, Lipper has devised two unique mutual fund search tools, with more in the works. “We’ve started with consistent return and preservation of capital,” says Tjornehoj. Within the next three months, after-tax performance and expenses-and-fees search tools will come online. The consistent return search criteria will screen for those funds that have returned solid risk-adjusted returns relative to their peers. The preservation criteria will find funds in broader asset classes, such as equity, fixed-income, or mixed equity, that have best avoided losses over a three-year period.

“Someone who does not watch their investments very closely might not understand what we are screening for,” says Tjornehoj. “For example, in the category of preservation under fixed-income, we get a lot of short-maturity and short-intermediate bonds dominating. That’s to be expected if you understand that shorter-term bonds generally mean less volatility. But a lot of individuals would not know that off the top of their head. We are trying to provide them with a simple tool to find a fund that will suit their needs.”

The Web site, which has been two years in the making, will be free to users. The site will rank funds by assigning them scores ranging from 1 to 5, and funds that score 1 (the top 20% of the peer group or asset class) are designated a Lipper Leader.

As for Lipper’s interest in advisors, Tjornehoj says that Lipper Leaders can spotlight those funds “that may not have been the best performers in an absolute sense but are better performers in a relative sense.” Lipper is making an earnest effort to avoid being a one-size-fits-all operation. “We understand that investors have different goals. Some look for middle-of-the-road investments, others look for more conservative plays.”

In these tough days for mutual funds, Lipper doesn’t expect the Lipper Leaders site to contribute much in the way of profits for the company. “We are not planning on making any money directly from, but we do want to see an increase in our top line through increased sales of LANA, LFA, and our data feed services,” according to Tjornehoj. LANA–Lipper Analytical New Applications–is a Windows-based system that provides in-depth fund information and analysis and LFA–Lipper Fund Analyzer–is Lipper’s entry-level electronic fund analysis tool. Pricing for these Lipper fund tools range from $250 for the most basic one-time data reports, called Quick Reports, to $100,000 for more sophisticated equity holdings products. “So if we can provide tools for investors that may prompt advisors to pick up LFA so they can talk about Lipper Leaders in more detail to their clients,” claims Tjornehoj, “then we’ve done our job.”


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