Manager review
The AB fund is managed by the firm’s emerging markets growth team, which is led by Laurent Saltiel, chief investment officer for emerging and international growth equities.
Sergey Davalchenko and Guojia Zhang, who are portfolio managers for emerging and international growth equities, join Saltiel in day-to-day investment decisions for the fund, said Ng.
“The team is supported by a designated group of analysts located around the world, and they meet regularly to discuss investment ideas, portfolio holdings and risk exposures,” Ng added.
Nick Price has been managing the Fidelity fund since July 2009 and joined the firm in 1998 as a research analyst.
As mentioned earlier, Price is supported by six fellow portfolio managers focusing on Latin America, emerging EMEA and emerging Asia.
“There are also 50 research analysts in Fidelity dedicated to emerging markets that feed ideas to Nick and his fellows around the globe,” said Ng.
Fees
The AB fund levies 1.7% annual management fees compared to the 1.5% charged by the Fidelity fund.
The total expense ratio (TER) or ongoing charges for the AB fund was 2.04% for the year ended 31 December 2014. The TER for the Fidelity fund was 1.98% for the year ended 30 April 2014.
“This is pretty much in-line with emerging market equity peers,” said Ng.
Conclusion
Both products get an FE 5 Crown Rating. The FE Crown Rating ranks funds based on alpha, consistency and volatility.
But the two funds are not clearly differentiated.
Both funds show similar characteristics in terms of portfolio concentration, valuation, style and volatility. Also, both funds have managed to outperform the market and peers over the past one, three- and five years, said Ng, who did manage to find a small distinction.
“The Fidelity fund tends to offer slightly better downside protection for investors and this could be important given emerging market equities are relatively volatile in nature,” he concluded.
