Lipper Indexes
Candlefocus EditorThe Lipper Index is designed to reflect the return of the overall mutual fund industry, and as such, it excludes funds that are more than 3 years old and ones that are not open to new investments. This set of benchmarks is also broad enough to cover both U.S. and international investments, allowing for a comprehensive assessment of a fund's performance relative to the broader market. Depending on the given strategy, anywhere between 30 and 100 funds are used to calculate the index’s performance.
The use of Lipper Indexes as a reference point when reporting fund performance has been steadily increasing over the years, and the index continues to be a reliable tool for investors and analysts alike. Lipper's sophisticated method of creating an accurate summary of broad fund performance is beneficial to anyone looking to assess and compare their fund performance with the market.
In essence, Lipper Indexes represent one of the best options for investors and analysts looking to assess the performance of actively-managed mutual funds to medium or long-term benchmarks. With their expansive range of fund strategies and asset classes, Lipper Indexes are a useful reference to accurately report the performance of individual funds relative to their peers.