HEAD-TO-HEAD: Fidelity vs MFS

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The three-year performance in the above chart shows that the MFS fund slightly outperformed the MSCI Europe Index and the Fidelity fund.

The Fidelity fund took a hit last year after betting wrong on the Brexit vote, noted Caquineau.

“The fund manager took some positions in stocks such as RyanAir and Eurotunnel in April and May last year, as she believed the UK would not vote to leave the EU.

“But she actually added tactically to these positions after the Brexit vote,” he said. “On the contrary, several holdings in the banking sector were sold off right after the vote as their outlooks turned dire, but she kept Lloyds for what she claims are very cheap valuations.”

The MFS fund, on the contrary, only made slight changes regarding the Brexit, he continued, and is underweight on banks.

For the past 12 months ended January 18, the MSCI Europe Index (13.4%) outperformed both the Fidelity (10.6%) and MFS (6.9%) funds.

Over the longer term, Caquineau believes the Fidelity fund has demonstrated the ability to navigate both up and down markets well. (The French version of this fund, using the exact same strategy, has returned an annualised 2.73% in euro terms, outpacing both the category average  of 1.37% and the benchmark with 2.07%).

The MFS fund shows consistent returns through different environments. “The fund outperformed the category average in every calendar year since 2006,” he noted, although it can sometimes lag performance in sharp market rallies that are led by lower-quality companies.

Three-year volatility, measured by standard deviation, is 12.73 for the Fidelity fund and 12.23 for MFS one, lower than category average (13.27) and benchmark (13.15).

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