HEAD-TO-HEAD: Columbia Threadneedle vs Fidelity

123456

The Fidelity fund delivered positive returns, while underperforming its benchmark over the past one, three and five year periods. It did better, over the three-year period, than the average for the category of international mixed-asset funds available for sale to investors in Hong Kong.

The Threadneedle fund did better than the Fidelity fund over the most recent one-year period, but underperformed it over the past three and five years. It also underperformed the category average.

Ng attributes the funds’ underperformance to their underweight in equities throughout 2017, when markets rallied, as well as a higher focus on income-generating stocks, while the rally was driven by growth and momentum.

Both funds had a low volatility in the past three-year period, below average for other funds in the category and less than half that of the MSCI AC World Index.

Since two funds have a different stated objective and follow different benchmarks, they should be evaluated independently on how they meet their respective goals.

“The Fidelity fund seems to meet its goal better thanks to a mixture of dividend generation factor as well as positioning to benefit from capital growth,” Ng said.

It is worth noting, that funds’ assets have shrunk over the past three years. The AUM of the Threadneedle fund is now 23% lower than it was three years ago and that of  the Fidelity fund is 29% lower.

The Fidelity fund, in particular, saw an estimated $48m in net outflows over the past three years, according to data from Morningstar. This does not reflect a global trend, as mixed-asset funds saw net inflows during that period.

Data: FE, 18 April 2018

123456