Head To Head

HEAD-TO-HEAD: DWS versus Fidelity

FSA compares two global equity income products: the DWS Invest Top Dividend Fund and the Fidelity Global Dividend Fund.

by Rupert Walker 14 May 202114 May 2021

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Jeffrey Schumacher, Morningstar

Introduction

Global equities rallied in April as continued loose monetary policy, vaccine rollouts, improving economic indicators and strong corporate earnings results encouraged risk appetite. The MSCI AC World Index finished the month up 4.4% in US dollar terms.

However, there are dangers to this ostensibly benign situation, and investors are already on alert.

Inflation fears have led to higher bond yields and made equity markets jittery.

Yet, yields are still at historically low levels, which makes it difficult for income seekers – while entry at this point in the credit cycle runs the risk of capital losses if inflation expectations rise further, and with them so do interest rates.

Meanwhile, in global equity markets the long-awaited rotation out of growth stocks into value stocks has found widespread support. This trend, if sustained, could be a boon to income investors, as value stocks typically pay higher dividends.

Against this background, FSA asked Jeffrey Schumacher, director of manager research at Morningstar, to select two global equity income products for comparison: the DWS Invest Top Dividend Fund and the Fidelity Global Dividend Fund.

	DWS	Fidelity
Size	$3.047bn	$10.508bn
Inception	2013	2012
Managers	Thomas Schuessler	Daniel Roberts
Three-year cumulative return	18.58%	35.48%
Three-year annualised return	6.21%	11.32%
Three-year annualised alpha	-2.47	0.85
Three-year annualised volatility	16.09%	18.49%
Three-year information ratio	-0.60	-0.02
Morningstar star rating	Silver	Bronze
Morningstar analyst rating	***	****
FE Crown fund rating	*	***
OCF (retail share class)	1.50%	1.90%

Source: FE Fundinfo, Morningstar. (Data in US dollars, 14 May 2021)

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