The FSA Spy market buzz – 6 September 2024
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Both the AB and Blackrock products behave differently in different market conditions, according to Wolfstetter.
For example, since the AB fund aims to limit downside risk, it fell less than the Blackrock fund in calendar year 2018.
“It was simply more resilient especially in the fourth quarter, and that is reflective of the performance differential.”
Discreet calendar year performance
Fund / benchmark |
YTD 2019 |
2018 | 2017 | 2016 | 2015 |
2014 |
AB Select US Equity Portfolio |
16.18 |
-6.49 | 20.21 | 7.34 | -0.67 |
11.43 |
Index : S&P 500 GTR in US |
17.12 |
-4.38 | 21.83 | 11.96 | 1.38 |
13.69 |
BlackRock GF US Flexible Equity |
15.69 |
-8.93 | 24.62 | 8.37 | -1.39 |
12.02 |
Index : Russell 1000 GTR in US |
17.48 |
-4.78 | 21.69 | 12.05 | 0.92 |
13.24 |
Sector HKM Equity – North America |
17.86 |
-7.9 | 20.51 | 7.19 | -1.31 |
10.22 |
However, because of its focus on limiting downside risk, the fund is expected to underperform during market rallies.
The opposite is true for the Blackrock fund: it was able to outperform the AB fund during the market rally in 2017, according to Wolfstetter. However, the fund had a more difficult time in 2018 when the market was down.
Wolfstetter noted, however, that both products have consistently underperformed their benchmarks.
“[The US equity markets] are difficult to outperform, especially because a lot of the outperformance is driven by the tech sector. But the two funds are actually doing better on a peer-relative basis,” she said.
In terms of volatility, Wolfstetter expects the AB fund to be less volatile than the Blackrock product because of its aim to limit downside capture.
Three-year annualised volatility
Fund / Index |
Volatility |
AB Select US Equity Portfolio C USD in US |
12 |
Index : S&P 500 GTR in US |
12.58 |
BlackRock GF US Flexible Equity A2 USD in US |
12.07 |
Index : Russell 1000 GTR in US |
12.59 |
Machine learning Chinese investment, BlackRock’s AI patience, Time Magazine’s AI cover, happier staff equal better returns, do wealth managers add value? sexy legs and much more.
Part of the Mark Allen Group.