HEAD-TO-HEAD: Blackrock vs Fidelity

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The Blackrock and the Fidelity fund versus its sector, according to FE data. Note: Both funds do not have benchmark indices.

Performance

Mottola believes that there are different factors driving the performance of both funds.

For the Blackrock fund, he said that “plenty of returns” have come from the fund’s covered calls strategy.

The Fidelity fund, by comparison, has benefitted from its equity allocation, which “has become a larger driver of returns when compared to the Blackrock fund.

“The Fidelity fund is a bit more return-seeking, so in 2016 and 2017, when the equity markets were up, they were able to see slightly higher returns,” he said.

Discreet annual calendar returns

Source: FE Analytics

In terms of volatility, the Blackrock fund is less volatile than the Fidelity fund, according to FE data.

YTD volatility

Source: FE Analytics

Because of its slightly lower allocation to equities, Mottola said that the Blackrock fund is expected to be more resilient during an equity-driven downturn.

“That might be the case. But so far the Blackrock fund has in fact had a slightly higher down capture ratio, meaning it has suffered a bit more [than Fidelity] when equities have been down.

“This may be driven by its other exposures such as high yield or the derivative strategies. It’s important to note that we still have limited track records for both funds, so the picture here is not yet full.”

Both funds are relatively new. The Blackrock fund’s inception was in 2012, while the Fidelity fund was launched in 2013.

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