Manager review
Edward Perks is the lead manager for the Franklin fund and has been managing it since 2002, according to FE Analytics. Alex Peters and Matthew Quinlan joined as deputy managers in December 2012.
The MFS fund’s portfolio management team is comprised of 11 people, all with at least a decade of industry experience. Out of 11, two are not responsible for day–to-day management, but are involved in advising and communication on portfolio management, according to the fund’s fact sheet.
Fees
The Franklin fund charges 0.85% annual management fees compared to 1.05% charged by the MFS fund.
The total expense ratio (TER) or the ongoing charges for the Franklin fund was 1.67% for the year ended 31 December. The TER for the MFS fund was 1.92% for share class A and 2.66% for share class B for the year ended 31 July 2014.
Conclusion
FE rates both funds 4 Crown. The FE Crown Rating ranks funds based on alpha, consistency and volatility.
The cumulative performance of each fund over the last 10 years is similar and therefore not a key differentiator, said Drago.
“Taking into consideration the current portfolio allocation, a bottoming out of oil prices near current levels will help the Franklin fund. But if oil prices continue to fall, that would have a negative impact on the fund.”
If equity markets move into bear market territory, the MFS fund would be better off, given its bond exposure to Japan and US sovereigns, and stronger credit rating portfolio.
“Overall, the MFS fund looks to be more attractive of the two, not only given its recent outperformance, but also due to its outperformance during the 2008 crisis period,” Drago concluded.
