The FSA Spy market buzz – 6 June 2025
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HEAD-TO-HEAD: Capital Group versus Fidelity
FSA compares two international equities products: the Capital Group World Growth and Income Fund and the Fidelity World Fund.
Fees
Fund research firm Morningstar pays a lot of attention to management charges and expenses, and share classes that charge excessive fees are typically assigned lower ratings.
The ongoing charges figure (OCF) for the retail share class of the Capital Group fund is 1.65%, which is in Morningstar’s second most expensive quintile.
It is above the 1.50% median OCF for international equity funds available to Hong Kong and Singapore retail investors, FE Fundinfo data shows.
The OCF for the Fidelity product is even higher, at 1.89%, which is in Morningstar’s costliest quintile.
Nevertheless, the fund research firm believes that the managers of both products can still generate alpha, despite their high expense charges.
Poole noted that Fidelity’s OCF is excessive high “even in the context of typically high fees charged for Asia retail share classes”.
However, as usual investors get what they pay for.
“Fidelity has consistently delivered strong performance, the Capital Group strategy is good at managing risk,” said Poole.
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