What is the Lipper index?
Mutual Fund is a type of investment in which combined shareholder money is used by an investment company to purchase investment vehicles such as stocks, bonds and money tools. The mutual fund index is a power monitoring system or evaluation that compares different mutual funds and monitors their performance. The Lipper Index is a leading index of the mutual fund created by Lipper Analytical Services, a subsidiary of Thomas Reuters. Over the next decade, the company has expanded and developed global indices. Now it is a leading service of monitoring mutual funds around the world with offices in the US, Europe, Asia and the Middle East. The Lipper Index calculates the performance of the Mutual Fund quarterly and in many ways every year in many ways that allow investors to compare their fund with the performance of similar funds.
There are several ways to categorize mutual funds, including the size or value of the companies they invest. This is determined by multiplying the originThe unpaid shares of each company of the value of each shares. The result is market capitalization or size of the ceiling of the company. Funds investing in companies with a market value exceeding $ 8 billion in the US (USD) are called large caps funds; Those investing in companies with a value of $ 1 billion and $ 8 billion are the funds in the middle of the capitalization; Funds invested in companies with a value of below $ 1 billion are called the funds of small captains. Investors using the Lipper Index can see how their fund compared to other funds in the same category of capitalization.
The Lipper Index also compares mutual funds according to their investment strategies, or if the Fund invests in growth shares, shares values or both mixtures. Growth funds include the largest elements because they invest in more expensive shares from fast -growing companies. Potential profit is greater if the growth rate continues but the fund is also at risk of greater loss if growthIt slowed down, resulting in a reduced shares of shares. Value funds buy stocks that are undervalued compared to their earnings and are less dependent on rapid growth to maintain value. Mixed funds invest in a combination of growth and value shares.
Investors with shares of sectoral funds can also use the Lipper index to compare their fund's performance with another is the same sector. The segment is the segment of the business community. While some funds seek to expand their investment risk to several types of industries, sectoral funds specialize in one area such as technology, energy, air industry, retail, etc. The Lipper index also provides comparison of funds based on countries, financial conditions and financial positions.