HEAD-TO-HEAD: Aberdeen Standard versus BNY Mellon

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Source: FE Fundinfo. Three-year cumulative returns in US dollars.

Performance

The three-year cumulative return generated by the BNY Mellon fund outstrips the ASI fund, also its benchmark MSCI World Index and the average return of its international equity category.

It has posted a 12.94% return, compared with -6.10% by the ASI product in US dollar terms, and 3.52% by its benchmark, 2.36% by the ASI fund’s MSCI AC World index benchmark and -3.28% for the sector average, according to FE Fundinfo.

“The ASI fund’s performance suffered in 2018 largely because of its exposure to the UK during the Brexit downdraft,” said Poole.

“It then failed to benefit from the UK market’s recovery last year, as it shifted its portfolio towards US stocks,” he said.

“Meanwhile, its drift towards growth stocks with high PE ratios meant it was vulnerable to the compression of multiples later in 2019,” he added.

A combination of these factors has contributed to the fund’s underperformance during the past three years.

The BNY Mellon fund’s returns have been slightly more volatile than the ASI fund (16.72% versus 15.21%), but its annualised return has been much higher, at 4.96% compared with -1.45%.

Over five-years, it has a cumulative return of 24.05%, which is also considerably better than the -4.68 return by the ASI fund.

“The BNY Mellon fund has an impressive long-term track record,” said Poole.

“Its performance is testimony to its style and process, and the ability of the managers to identify companies with high quality balance sheets and with growth potential,” he said.

As a result, the fund has held up better than most during the sharp fall in equity markets in March this year.

Discrete annual performance

Source: FE Fundinfo. Annual returns in US dollars.

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