HEAD-TO-HEAD: Fidelity vs Investec

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The three-year cumulative performance of the Fidelity and Investec funds versus their benchmark indices.

On a three-year cumulative performance basis, the Fidelity fund just about matched the performance of its benchmark index, the MSCI World. It outperformed the Investec fund.

However, on a calendar year basis, in 2017 Ng pointed out that the Investec fund outperformed both its benchmark and the Fidelity fund.

In earlier calendar years, such as 2015 and 2016, Ng said that there was a strong bias toward developed market equities, which gave the Fidelity fund a boost over the Investec fund.

“But the situation changed in 2017. The US dollar began to weaken and global equities were primarily led by emerging markets. That is why the Investec fund performed better in 2017,” he said.

Discrete annual performance (%)

Source: FE Analytics

Ng noted that the Fidelity fund may have better downside protection during down markets because of its bias toward value stocks relative to the Investec fund. The Investec fund, meanwhile, should perform better when markets are in a period of relatively low volatility.

In terms of volatility, the Fidelity fund is slightly less volatile than the Investec fund on a three-year annualised basis.

Three-year annualised volatility

Source: FE Analytics

Ng explained that the Investec fund’s exposure to emerging markets has made the fund more volatile than the Fidelity fund, adding that Investec’s MSCI AC World benchmark is also more volatile than Fidelity’s MSCI World Index.

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