HEAD-TO-HEAD: Franklin Templeton versus Loomis Sayles

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PERFORMANCE

The Franklin fund has delivered strong annual returns for several years, and its three-year cumulative performance exceeds its peers by a considerable margin.

It has generated a cumulative return of 77.90% during the period, compared with a 30.47% return by North American equity funds (which includes value as well as growth styles) available to Hong Kong and Singapore investors, and has also beaten its Russell 3000 Growth index benchmark (74.6%) according to FE Fundinfo data.

The fund has also performed better than its peers each calendar year, except in 2016, FE Fundinfo data shows, but it has lagged its benchmark most years.

It has a stellar 2020 so far, up 36.32% to 5 November, compared with 22.17% by its benchmark and only 7.18% by its peers.

“The managers’ committed growth style and astute stock picking across different market cap sectors has proven successful,” said Poole.

“However, the fund is quite volatile, and recovery from drawdowns tends to take several months, which raises its risk profile,” he said.

Its annualised volatility over the past three years is 21.95%; on the other hand, it has earned annualised alpha of 9.38 in the same period, according to FE Fundinfo.

The Loomis Sayles product has also performed well.

It has achieved a three-year cumulative return of 58.53%, and is up 22.72% year-to-date, according to FE Fundinfo.

“Like the Franklin product, the Looms Sayles fund has been riding the powerful wave driving the growth theme,” said Poole.

Long-held positions in Amazon, Facebook, and Alphabet have contributed to the strategy’s success, and strong stock-picking in consumer cyclical and communication services has also helped performance.

It has generated an annualised alpha of 7.51 over three years, which is lower than the Franklin fund, but it is more stable, with annualised volatility of 20.25%, FE Fundinfo data shows.

“The product recovers quicker from drawdowns, and on a risk-adjusted basis is more appealing,” said Poole.

Discrete annual performance

Source: FE Fundinfo. Annual returns in US dollars. *to 5 November 2020

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