Performance review
The Fidelity fund benchmarks its performance against the MSCI World Index. The Nordea fund does not follow a specified benchmark index.
Both funds have outperformed the peer group in the category of global equity funds over six-months, one-year, three-year, and five-year periods until 31 July, Ng said.
A look at the performance over various periods until 31 July:
Source: FE Analytics
Source: FE Analytics
A look at calendar year returns:
Source: FE Analytics
“The Nordea fund managed to deliver positive returns in every calendar year since the financial tsunami of 2008 due to its strong focus on stable equities,” said Ng.
The Nordea vehicle also gave a strong performance in 2011 when the average returns of the category declined by over 9%, he added.
Moreover, the Nordea vehicle is less volatile compared to the Fidelity fund. Beta, a measure of volatility, was 1.15 for the Fidelity fund for a five-year period compared to 0.79 for the Nordea product.
Manager review
Podger, the Fidelity fund manager, joined the firm in February 2012 and started managing the fund in June 2014. He is also manager for the Fidelity Global Special Situations Fund.
“Prior to joining Fidelity, he had 20 years of experience managing global equity mandates with Threadneedle and Investec,” said Ng.
“Jeremy Podger is also supported by 150 research analysts across Europe and Asia. The open environment of Fidelity also enables him to exchange and discuss views with other portfolio managers and form investment ideas.”
The Nordea fund has been co-managed by Claus Vorm and Robert Naess since 2005, according to FE Analytics.
“Both managers are part of the Nordea multi-asset team and have been adopting a stable approach in managing the fund.”
Fees
Both funds charge 1.5% annual management fees. The total expense ratio or ongoing charges are similar too.
The TER for the Fidelity fund was 1.93% for the year ended April 2014 while the TER for the Nordea fund was 1.91% for the year ended 31 December.
“Fee levels are pretty much in-line with market peers,” said Ng.
Conclusion
The FE Crown Ratings for the two funds are very close: the Fidelity fund is rated 4 Crowns and the Nordea vehicle gets 3 Crowns. (The FE Crown Rating ranks funds based on alpha, consistency and volatility).
The Nordea vehicle received the platinum award at the inaugural FSA fund awards in the global equity funds category in the Singapore universe.
Both funds are good vehicles for investors to capture developed market equity exposure, said Ng.
“Despite different style and strategic focus, both fund managers and teams have been delivering strong and consistent performance for investors.
“However, the Fidelity fund tends to deliver strong performance in a rising market, but volatility also tends to be higher. It would be more suitable for investors looking for growth or when global economic growth is resilient.”
“On the other hand, the Nordea fund offers better downside protection and would better suit conservative investors,” Ng concluded.
