HEAD-TO-HEAD: Blackrock versus Threadneedle

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Source: FE Analytics (fund NAVs in US dollars)

Performance

“The funds have generated similar returns over 10 years, but the Blackrock performance has been superior over five years and also for shorter periods,” said Ng.

Threadneedle has achieved 112.16% cumulative return since May 2009, slightly higher than the 110.76% return earned by Blackrock.

However, the relative performances of the two products have sharply diverged since Nicholas Little became manager of the Blackrock fund in 2013.

He has generated a 41.46% five-year cumulative return, 14 percentage points more than Mark Westwood at Threadneedle during that period. His fund has achieved a 22.6% return over three years, compared with only 3.41% by Threadneedle, while the annualised volatility of both funds is a little over 13%

Moreover, “Blackrock has outperformed Threadneedle in each of the past calendar years, doing better in positive periods as well as negative periods for the UK market,” said Ng.

“In 2017 it also produced better returns than the benchmark index, which it has also outperformed over three years.”

“But, neither fund did well in 2016, with both underperforming the FTSE All Share index,” he added.

Ng attributes Blackrock’s better outcomes to its stock selection style, “which combines earnings growth with a quality bias, and also a top-down overlay that allows the fund to make sector re-allocations when economic or market conditions change”.

“In contrast, Threadneedle made some poor stock picks in 2016 and again in 2018, notably in the industrial sector, which largely accounts for the fund’s disappointing performance,” said Ng.

Discrete annual performance % (US dollars)

 Source: FE Analytics

*Equity – UK

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