HEAD-TO-HEAD: Blackrock versus Capital Group

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PERFORMANCE

Over the long term, Blackrock GF Global Dynamic was resilient in more volatile market conditions and drawdowns, although the performance during the coronavirus-related sell-off did not stand out, noted Wolfstetter.

Last year, the fund posted a 24.48% return, outperforming the average return of its international equity sector peers (17.17%); it has generated a three-year cumulative return of 34.7%, also significantly higher than the 26.2% cumulative return by its peers, according to FE Fundinfo data.

“The strategy’s previous value-tilt and an underweighting in US stocks have been headwinds, but the repositioning towards stocks with consistent cash flows should help the fund outperform under a wider range of market conditions than in the past when it has tended to lag in strongly rising growth-driven markets,” said Wolfstetter.

Capital Group New Perspective performed even more strongly last year, achieving a 32% return, according to FE Fundinfo. Its three-year cumulative return of 54.36% is also substantially superior to both its peers and the Blackrock product, and it has earned 6.62 of alpha during that period with an information ratio (a measure of risk-adjusted returns) of 1.39.

“Based on its mix of investment styles, the fund has generated good performance in a variety of markets. In addition, it has typically lost less than the MSCI ACWI in downturns, including during the coronavirus sell-off in late March and early April,” said Wolfstetter.

The two funds have similar volatility of around 20%, although Wolstetter noted that the combination of different sleeves should dampen Capital Group New Perspective’s volatility over time.

Discrete calendar year performance:

Source: FE Fundinfo. Returns in US dollars.

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