Posted inHead To Head

HEAD-TO-HEAD: Capital Group versus T Rowe Price

FSA compares two emerging market equity products: the Capital Group New World Fund and the T Rowe Price Emerging Markets Equity Fund.
by Rupert Walker

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FEES

Fund research firm Morningstar pays a lot of attention to management charges and expenses, and last year started differentiating it ratings of the individual share classes of each product. Share classes that charge excessive fees are now typically assigned lower ratings.

The ongoing charges figure (OCF) for retail share class of the Capital Group fund is 1.90%. which is above the 1.80% median fee for emerging market equity funds available in Hong Kong, according to FE Fundinfo

“That’s poor, but we still think this share class will be able to overcome its high fees and deliver positive alpha relative to the category benchmark index, explaining its Morningstar analyst rating of bronze,” said Caquineau.

The OCF for the T Rowe Price fund is even higher, at 2.01%, which is in its Morningstar category’s most expensive quintile.

“Such high fees stack the odds heavily against investors,” said Caquineau, “so we don’t think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar analyst rating of neutral.”

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