HEAD-TO-HEAD: Capital Group versus Fidelity

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Source: FE Fundinfo. Cumulative returns in US dollars.

Performance

The Capital Group strategy has delivered solid risk-adjusted returns. Between October 2009 and February 2021, it generated 10.5 annually, which although less 0.64% less than its MSCI ACWI benchmark, it had below-average volatility, according to data from Morningstar Direct.

“However, the struggle to beat its benchmark is largely due to often high cash balances and its typically under-weight position in US equities,” said Poole.

The strategy was only incepted as a Ucits in September 2019, so there is limited historical performance data available.

Nevertheless, it has delivered a healthy cumulative return of 34.2% so far, according to FE Fundinfo, with annualised volatility of 23.47%. Year-to-date, the fund is up 8.05%, just trailing its peer average return of 8.24%.

The Fidelity fund, however, is characterised by its above average performance.

Over three years, it has achieved a 46.6% cumulative return, compared with an average 39.94% international equities funds available to Hong Kong retail investors, according to FE Fundinfo.

It has also done better since the Ucits inception of the Capital Group fund in September 2019, posting 42.44% versus the sector average of 37.36%.

However, the Fidelity product has underperformed the MSCI World index (50.36%) during the past three years, and lags its benchmark year-to-date, posting 9.08% versus 9.77%, FE Fundinfo data shows.

Its returns have also fluctuated, and it has an annualised volatility of 26.79% since September 2019, compared with 23.47% for the Capital Group fund, 25.41% for the benchmark and 23.00% for its peers.

“The unconstrained nature of the mandate can lead to higher volatility than the benchmark,” said Poole.

“Yet, it generates strong returns, with achieved primarily through stock selection,” he said.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 7 May 2021

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