Posted inHead To Head

HEAD-TO-HEAD: AB vs Nomura

FSA compares two large-cap Japan equity products: the AB FCP I - Japan Strategic Value Portfolio Fund and the Nomura Japan Strategic Fund.
by Francis Nikolai Acosta
Conclusion

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Both funds carry a three-star rating and an analyst rating of Neutral.

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

Yew did not express preference for one fund over the other, but said that each fund should appeal to different kinds of investors.

For example, the AB fund would suit investors who have a higher tolerance to volatility and a longer investment horizon.

Given that the fund is highly concentrated, if it underperforms, it may take time for it to recover, he said, adding that the fund is not suitable for investors who have higher liquidity needs.

The Nomura fund is appropriate for investors who have a shorter investment horizon, given that its average annual turnover is 50%, compared to the AB fund’s turnover of 30%.

He noted that investors should also be aware that the Nomura fund may underperform if small cap stocks go out of favour.

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