Posted inHead To Head

HEAD-TO-HEAD: AB versus Blackrock

FSA compares two US equity products: the AB American Growth Portfolio and the BGF US Flexible Equity Fund.
by Francis Nikolai Acosta

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CONCLUSION

The AB fund receives a four-star Morningstar rating and analyst ratings from Negative for the highest-cost share class to Bronze for the cheapest, with most share classes receiving a Neutral rating, including its clean share class, according to Wolfstetter.

Meanwhile, the Blackrock fund receives a three-star Morningstar rating and analyst ratings of Neutral for its cheaper share classes and Negative for the more expensive ones. Its clean share class is rated Neutral.

Based on their clean share classes, which both carry Neutral ratings, Wolfstetter does not recommend one fund over the other.

“We lack conviction into their ability to outperform their [indices] on a risk-adjusted basis over time,” she said.

“The AB strategy is untested in a sustained downturn or a generally less benign market for growth investing.

“Meanwhile, given its still-short lead manager tenure, evolving analyst team and process tweaks, the Blackrock fund also needs to prove it can deliver consistently improved results,” Wolfstetter added.

That said, there are stylistic differences between the funds, which would appeal to different investor needs.

The AB strategy is more suitable for investors looking for a growth-oriented strategy, while investors looking for less valuation risk would be better served with the Blackrock fund, Wolfstetter said.

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