Posted inHead To Head

HEAD-TO-HEAD: Barings versus Merian

FSA compares two European (ex-UK) small-cap equity products: the Barings Europe Select Trust and the Merian Europe (ex UK) Smaller Companies.
by Rupert Walker

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CONCLUSION

“Both funds look for quality growth companies, so they should outperform when their style is in favour,” said McDermott.

“However, the Barings fund is more valuation sensitive, and in a high growth environment I’d expect the Merian fund to outperform,” he said.

“In a value rally both are likely to underperform, but the Barings fund is likely to hold up better in falling markets.

The Barings product has a four-star rating from Morningstar, whose criteria is based on historical risk-adjusted returns.

Under its enhanced rating methodology, which places an emphasis on fees and benchmark-relative performance, the strategy also earns a Morningstar analyst rating of Silver.

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the fund three crowns.

Morningstar awards the Merian fund two stars and an analyst rating of Neutral, while FE Fundinfo assigns it just one crown.

“Both funds have very good, experienced teams that have worked together for many years and shown that they can consistently add value,” said McDermott.

“For the time being, I would pick the Barings fund for its consistency, although the Merian fund is definitely one to watch for the future,” he concluded.

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