Posted inHead To Head

HEAD-TO-HEAD: Blackrock versus Capital Group

FSA compares two global equity products: the Blackrock GF Global Dynamic Equity Fund and the Capital Group New Perspective Fund.
by Rupert Walker

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FEES

As Morningstar emphasises in individual fund reports, it is critical to evaluate expenses, because they come directly out of returns.

The ongoing charge figure (OCF) of Capital Group New Perspective is 0.87% on its Z clean share classes, which is lower than the 1.09 charged on the D2 clean classes of BGF Global Dynamic. Capital Group New Perspective’s B retail classes charge 1.63% against 1.84% for the BGF fund’s A2 retail classes.

The median fund charges 1.57%, so both OCF are high, according to Wolfstetter

The OCFs for both products are in Morningstars’ second costliest quintile, but the firm does not think that the Blackrock fund can overcome its high fees to deliver positive alpha relative to its category benchmark index,

In contrast, Morningstar believes that the Capital Group fund is able to generate alpha, despite its expensive fees, based on the research firm’s assessment of the fund’s people, process and parent pillars.

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