HEAD-TO-HEAD: Fidelity vs MFS

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Both the two funds receive a Morningstar analyst rating of Silver and a four-star rating.

Morningstar’s analyst rating is a forward-looking analysis of a fund, while the star rating looks at historical risk-adjusted performance.

Analysts assign the ratings on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating. A Gold, Silver, or Bronze rating means Morningstar analysts think highly of the fund and expect it to outperform over a full market cycle of at least five years.

“Both funds suit investors who do not want any style bias, which can potentially suffer less [when markets shift toward one style]. They are not too aggressive, nor too conservative, but in the middle of the road.

“They act as a good option for core holdings for European equities,” he said.

“These two funds show an interesting comparison as they share similarities but vary in managing styles – one portfolio manager versus a team of analysts. It proves that there’s not just one way of managing a successful fund,” Caquineau noted.

“The Fidelity fund manager is like the captain of the ship and the decision-making process can be quicker.”

The MFS fund can avoid the key-man risk, he said, although it might also mean that the 10-member team needs to take more time before finalising the decisions.

That said, the MFS portfolio is long-term oriented, hence the team approach is viable, he said.

The MFS fund is preferred for investors who want more consistent performance, as it has better relative returns than the Fidelity fund, he added.

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