HEAD-TO-HEAD: Fidelity versus Ninety One

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Bhavik Parekh, Morningstar

Introduction

The recent global equity rally, especially for cyclical sectors, has been driven by robust earnings recovery. However, local factors have been driving a divergence amongst different regions, according to Tai Hui, Asia chief market strategist at JP Morgan Asset Management.

For instance, China’s policy normalisation and regulatory scrutiny on the tech sector have undermined local market performance, he told a media briefing this week.

Meanwhile, the US is now leading the global economic recovery, helped by its rapid vaccination progress and sizeable fiscal stimulus.

Yet, “Europe could offer more near-term positive surprises in corporate earnings,” he said.

In terms of sector, rising bond yields should still benefit cyclical sectors, such as financials, and industrials; some investors may also choose materials and energy sectors as a hedge against the risk of inflation staying elevated for longer than expected.

“Value sectors are in a sweet spot for earnings when global growth is strong, they still have room to run, even if they have already come a long way,” said Hui.

Against this background, FSA asked Bhavik Parekh, London-based manager research analyst at Morningstar to select two global equity products for comparison: the Fidelity World Fund and the Ninety One Global Strategic Equity Fund.

Source: FE Fundinfo, Morningstar. (Data in US dollars, 8 July 2021)

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