HEAD-TO-HEAD: Fidelity versus MFS

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

Performance

Both funds have outperformed the average return of their international mixed asset peers during the past three years.

The Fidelity fund has generated an 8.15% cumulative return and the MFS fund has achieved 6.81%, compared with 6.80% for the sector average, according to FE Fundinfo data.

The MFS Meridian Global Total Return Fund has a higher volatility of the two products, with 9.9% volatility for the trailing three-years to end-May 2020, said Möttölä.

“This is a notch above its category average, but not much,” he said.

Meanwhile, the MFS fund returns have compared favourably to its peer group.

“In 61% of rolling three-year periods the US dollar share class has been in the top quartile of the category; and indeed, between 2011 and 2019, the fund landed below the average of the category in only one calendar year, that is 2018,” said Möttölä.

“As for the Fidelity Global Multi Asset Income Fund, the product has been a solid and consistent performer among its peers,” he said.

In rolling three-year periods, the fund’s performance has typically landed in the second quartile and very rarely in the bottom half. However, its lower equity risk exposure can be a hindrance in strong bull markets compared with funds in its mixed asset category. This was apparent in 2017 and 2019 when returns lagged those of its peers.

“Nevertheless, downside protection is what counts here, and that was showcased in difficult 2018 when the fund landed in the top decile of the US dollar moderate mixed asset allocation category,” said Möttölä.

He pointed out that in the first five months of 2020 both funds have trailed the category average slightly, which in Fidelity’s case “is disappointing, considering the fund’s defensive strategy.

“The main reason for this failure is the managers were fairly upbeat about the global economy coming into 2020 and had positioned for a period of growth,” he said.

“Overall, in terms of performance the Fidelity and MFS funds are about even,” concluded Möttölä.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars.

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