Posted inHead To Head

HEAD-TO-HEAD: Axa vs Pimco

FSA compares two inflation-linked bond funds: the Axa World Funds Global Inflation Bonds Fund and The Pimco GIS Global Real Return Fund.
by Fund Selector Asia
Performance

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Pictured: Three-year performance of the two funds, their benchmarks and the category average, on 7 September 2017, in US dollars.

While comparing the funds’ performance, especially for inflation-protected bond funds it is important to note that the Axa fund is hedged to the euro while the Pimco fund is hedged to the US dollar.

While the Axa fund delivered a negative 2.49% return over the past three-years in US dollar terms, its return in the euro terms was a respectable 8.03%.

Axa WF Global Inflation Bonds Fund Pimco GIS Global Real Return Fund Bloomberg Barclays Global Inflation-Linked Hedge USD Index
3-year return (cumulative) -2.49% 8.83% 13.56%
1-year return 4.46% 0.61% 0.49%
3-year Alpha -0.13 0.21
3-year Beta 2.24 0.86
3-year Sharpe Ratio 0 0.26
3-year Volatility 2.80 1.51 1.51
Data: FE, 31 August 2017, return in US dollars, ratios are cumulative

The Pimco fund has been “ahead of its category by around 0.7%, which is a pretty good margin of outperformance,” Dobrescu noted, especially since the number is net of fees. “In this category it is generally hard to add a huge magnitude of value.”

“What’s disappointing about both funds is that they have been lagging the index by quite a bit,” she said, adding that the Axa fund’s margin of underperformance was higher than Pimco’s.

The Pimco fund is likely to do better in risk-on market conditions, because its managers have more latitude to tap into more risky opportunities, according to Dobrescu. “If the managers are able to execute it properly and to have good timing,  the fund is probably going to do better.”

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