Each fund’s performance is measured against all of the other funds in its Refinitiv Lipper category, with a percentile ranking of 100 being the highest and one the lowest. This result is then weighted by asset size, relative to the fund family’s other assets in its general classification. If a family’s biggest funds do well, that boosts its overall ranking; poor performance in its biggest funds hurts a firm’s ranking.

To be included in the ranking, a firm must have at least three funds in the general equity category, one world equity, one mixed equity (such as a balanced or target-date fund), two taxable bond funds, and one national tax-exempt bond fund.

Single-sector and country equity funds are factored into the rankings as general equity. We exclude all passive index funds, including pure index, enhanced index, and index-based, but include actively managed ETFs and so-called smart-beta ETFs, which are passively managed but created from active strategies.

Finally, the score is multiplied by the weighting of its general classification, as determined by the entire Lipper universe of funds. The category weightings for the one-year results in 2021 were general equity, 37.1%; mixed asset, 20.6%; world equity, 16.8%; taxable bond, 20.9%; and tax-exempt bond, 4.5%.

The category weightings for the five-year results were general equity, 37.3%; mixed asset, 21%; world equity, 16.5%; taxable bond, 20.8%; and tax-exempt bond, 4.4%. For the 10-year list, they were general equity, 38.6%; mixed asset, 19.2%; world equity, 16.9%; taxable bond, 20.5%; and tax-exempt bond, 4.8%.

The scoring: Say a fund in the general U.S. equity category has $500 million in assets, accounting for half of the firm’s assets in that category, and its performance lands it in the 75th percentile for the category. The first calculation would be 75 times 0.5, which comes to 37.5. That score is then multiplied by 37.1%, general equity’s overall weighting in Lipper’s universe. So it would be 37.5 times 0.371, which equals 13.9. Similar calculations are done for each fund in our study. Then the numbers are added for each category and overall. The shop with the highest total score wins. The same process is repeated to determine the five-and 10-year rankings.

Visit Barrons.com for more information about the Barron's/Lipper Top Fund Families rankings.

¹Vanguard’s asset-weighted average expense ratio is less than one-fifth the industry average. Sources: Vanguard and Morningstar, Inc., as of December 31, 2023.

²In 2019, Vanguard received Morningstar’s inaugural “Exemplary Stewardship Award,” which recognizes the asset manager that has shown an unwavering focus on serving the best interests of investors. Morningstar conducts in-depth qualitative analyses in order to select nominees and, subsequently, vote to determine the award winner. To qualify for the award, the firm must have received a Parent pillar rating of "positive." The Parent pillar rating measures the quality of a firm's care of investors' capital. The firms must demonstrate an investor-focused corporate culture and an alignment of interests between investors and the people who control the destiny of the investment strategies.

³ Source: Vanguard and Morningstar Target-Date Strategy Landscape 2023.