HEAD-TO-HEAD: Comgest vs Robeco

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The Comgest fund outperformed the Robeco product and the benchmark index over the trailing three years, returning 9.62% versus 5.52% for Robeco and 3.71% for MSCI Emerging Markets Index, according to FE.

Over a five-year period, both funds also beat the benchmark. The Comgest fund returned 40.4%, Robeco 32.2% and the benchmark 24%.

However, one-year return figures showed Robeco beating both the benchmark and Comgest fund, as the value style of investing is currently paying off, Caquineau explained.

“Both funds have a strong investment style, meaning that they will likely underperform in certain market conditions when their specific style is out of favour.”

The Robeco fund tends to invest in companies that have higher volatility than Comgest’s choices, so Robeco has more downside risk, he said. For instance, it underperformed both the Comgest fund and the benchmark during the financial crisis in 2008.

The trailing three-year downside capture ratio, which judges the ability of the fund to offer protection in a downcycle (with a lower number offering the better protection), is 92.8% for the Robeco fund versus 88.4% of Comgest’s.

Caquineau noted that one should look at the long-term volatility level of the two funds instead of the three-year period, as the Comgest fund only added some Chinese names in the past three years, which resulted in higher volatility.

The ten-year volatility, in terms of standard deviation, reaches 20.62 for the Comgest fund and 25.43 for the Robeco fund, versus 23.42 for the MSCI Emerging Markets Index.

On the other hand, “the Comgest fund’s relatively conservative portfolio is prone to lag in strong rallies”, he said.

“The fund lagged in early 2011 because of the strong rally in oil-related stocks, which were not present in the portfolio. But fund performance then caught up, showing, as expected, better resilience during the summer correction.

“The fund demonstrated again its defensive qualities in the challenging market conditions of 2013 and 2015.”

The trailing three-year upside capture ratio (with the higher number capturing the higher upside) is 99.3% for Comgest, and 100.4% for Robeco. The ratio measures the ability of the fund to offer outperformance in a upcycle.

“It’s important to look at the returns of both funds in the long run, as inevitably, these two funds will go through difficult periods due to strong style preferences. But their long-term performance beats the index.”

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