HEAD-TO-HEAD: Dimensional versus Ninety One

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

Performance

The two funds have similar long-term performance, despite very different investment approaches.

“It is curious that their performance is so matched, but it is just a coincidence,” said Liu. “The Dimension fund is not benchmark aware, and the Ninety One fund’s portfolio is largely based on bottom-up stock analysis.”

The Dimension strategy has outperformed most of its peers during the trailing five- and 10-year periods, largely because of its efficient and deep representation of the market, moderate factor exposures, and a competitive fee.

The fund has generated a three-year cumulative return of 45.8%, which is better than the average return of funds in its international equity category (42.8%), according to FE Fundinfo.

However, it is quite volatile with annualised volatility of 22.16% over the same time-period, so its risk-adjusted return is less impressive, as indicated by its information ratio of only 0.12.

“The fund has prospered from this year’s value rotation and bounce back for small-cap stocks,” said Liu.

The Ninety One strategy also has a strong long-term track record, according to Liu.

It has achieved a three-year cumulative return of 39.2%, according to FE Fundinfo, and outperformed last calendar year during a period of extraordinary market fluctuations. Over three years, its annualised volatility is 21.5%, and its information ratio is -0.17, FE Fundinfo data shows.

“Outperformance has generally been driven by good stock selection,” said Liu.

“The fund also tends to do better during market upturns, but struggles when there are market corrections,” she added.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 30 June 2021

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