HEAD-TO-HEAD: Fidelity versus Loomis Sayles

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Lena Tsymbaluk, Morningstar

Introduction

The top-down arguments for US equity market outperformance seem pretty clear, according to Alex Wolf, head of investment strategy, Asia, JP Morgan Private Bank

A huge fiscal stimulus is being pushed through by the Biden administration, the vaccination roll-out is progressing faster than in most other major economies, and GDP growth expectations for the year are around 6%, the highest rate since 1980.

However, he points out, after an impressive rally off the March lows (the S&P 500 gained +61% between April 2020 and April 2021, outperforming other global markets in US dollar terms), there might be other regions that could catch up.

Yet, supporting factors remain robust for US equities, despite the spectre of higher inflation.

“But a healthy recovery also comes with a healthy amount of inflation, consistent with the Fed’s goals for an average of 2% over time,” noted Wolf.

He recommends investors should consider adding to cyclicals and value areas of the equity market (financials, industrials, energy), while other strategist, such as at DWS, remain confident that technology growth stocks should be a key overweight because of the secular digitalization trend.

Against this background, FSA asked Lena Tsymbaluk, analyst at Morningstar, to select two US equity products for comparison: the Fidelity America Fund and the Loomis Sayles US Growth Equity Fund.

Source: FE Fundinfo, Morningstar. (Data in US dollars, 18 June 2021)

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