HEAD-TO-HEAD: Franklin Templeton versus Loomis Sayles

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Conclusion

The Franklin US Opportunities Fund has generated strong returns, but at the expense of volatility and drawdowns,” said Poole.

The product has a five-star rating from Morningstar, whose criteria is based on historical risk-adjusted returns. In addition, it has been awarded a silver analyst rating by the firm.

However, under its enhanced rating methodology, which places an emphasis on fees and benchmark-relative performance, the strategy only earns a Morningstar analyst rating of neutral.

“The application of this strategy’s approach by the manager has failed to result in a competitive edge when its growth style is taken into account,” according to the most recent report by the fund research firm.

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the fund four crowns.

The Natixis Loomis Sayles US Growth Equity Fund is better rated by FE Fundinfo, which gives it five crowns, but only receives three stars from Morningstar.

However, it does have a silver analyst rating, because of the “veteran manager and disciplined long-term approach,” notes Morningstar’s recent research report.

Ultimately, Poole favours the Loomis Sayles product over the Franklin fund.

He is impressed by the high conviction portfolio and low turnover.

“The fund gives exposure to the US and growth, yet provides essential downside protection too,” he said.

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