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The Blackrock fund receives a Morningstar analyst rating of Silver and a four-star rating, while the Fidelity fund receives a Bronze analyst rating (it does not yet have a star rating).
Morningstar’s analyst rating is a forward-looking analysis of a fund, while the star rating looks at historical risk-adjusted performance.
Mottola did not say which fund he prefers, but instead referred to the analyst rating.
“We have a Silver rating on the Blackrock fund versus a Bronze rating on the Fidelity fund. This means we currently have slightly higher conviction in the Blackrock product. The main difference lies in the Blackrock product’s longer track record, which the team built in the US in 2011. The Fidelity team was formed in 2013,” he said.
Mottola said that investors looking at taking more equity risk might prefer the Fidelity fund, while the Blackrock product may be more suitable for investors who are more defensive.
“But the difference in risk-taking is quite small, and both aim to preserve capital through diversification,” he added.
“Both funds are also suitable for income-seeking investors who are comfortable with a moderate level of risk. These funds seek to do fairly high payouts compared to current stock market dividend yields or government bond yields.”