HEAD-TO-HEAD: BNP Paribas versus Pictet

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Source: FE Fundinfo. Three-year cumulative returns in US dollars.

PERFORMANCE

“From its launch, the BNP Paribas strategy has delivered decent returns versus the MSCI World category benchmark, while it was comfortably ahead of sector equity ecology category peers,” said van Genderen.

The fund has generated a three-year cumulative return of 47.24%, compared with 32.02% by the MSCI World index, according to FE Fundinfo.

“Although the MSCI World index is not an ideal comparator for this environmental-focused mandate, there isn’t an investable, similarly-focused alternative available,” said van Genderen.

The relative performance of the strategy versus index has been volatile, as can be expected given its differentiating style, size, and sector exposures. It has annualised volatility of 22.11% over the past three years, FE Fundinfo data shows.

“2018 was disappointing, with the strategy well behind the category benchmark owing to negative stock selection results in the consumer cyclical and utilities sectors, while the overweight in industrials proved to be an additional drag on performance,” said Genderen.

In the turbulent markets of 2020, the strategy’s outperformance was driven by not having exposure to the energy and financial services sectors, and strong results in the healthcare, industrials, and utilities sectors, according to van Genderen.

The tilt towards cyclical, industrial sectors has worked well for the managers so far this year, with the fund up 8.37%, FE Fundinfo data shows.

Turning to the Pictet fund, “after the repositioning of the strategy to its current approach in October 2014, the managers have built a strong track record,” said van Genderen.

Its three-year cumulative performance is also healthy, with the fund achieving a 57.35% return, with annualised volatility of 20.88%, lower than the BNP Paribas strategy, according to FE Fundinfo.

The fund’s technology tilt has helped performance, especially last year and in 2019.

“Stock selection is the most important driver of relative performance, but its large market-cap preference, regional and sector allocations, and growth style can all be at play,” said van Genderen.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 16 April 2021

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