HEAD-TO-HEAD: Investec vs Natixis

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The Investec fund receives a Morningstar analyst rating of Neutral and a five-star rating, while the Natixis fund receives a Bronze analyst rating and a three-star rating.

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

The FE rating, which measures alpha, volatility and consistency over three years, is two crowns for the Investec fund and one crown for the Natixis fund.

Both funds have strong active share, which is condition for generating alpha. The products are also distinct from each other in terms of their investment approach. Investment teams are also strong.

Natixis’ product has a lower allocation to US equities than Investec. It has higher exposure than the category average to emerging market equities, which have started to perform well after years of underperformance. Should the EM equity run continue, the fund could benefit.

The Investec fund provides better risk-adjusted returns than the Natixis fund, according to FE data. The Investec’s fund’s three-year volatility is 10.81, while Natixis’ is 14.75. Investec’s three-year Sharpe ratio is higher at 0.28 versus Natixis’ 0. Investec’s Sharpe ratio is also higher than the category median of 0.035.

Based on the Morningstar and FE crown ratings and the performance-related data, the Investec fund may be a better choice between the two, especially since both funds are expensive relative to the category.

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