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HEAD-TO-HEAD: Franklin Templeton versus Merian
FSA compares two US equity products: the Franklin Templeton US Opportunities Fund and the Merian North American Equity Fund.
Fatima Khizou, Morningstar
Introduction
The impact of the Covid-19 pandemic on the global economy has soured investor sentiment, driving down stock markets worldwide.
Among the major markets, the US equity market, which has outperformed its global peers for the past few years, continues to do better compared with emerging market and Asia indexes. The only exception is China, which has been showing signs that its economy is starting to recover after the lockdown of Wuhan at the beginning of the year was lifted last month.
| Index | YTD performance |
| MSCI China | -6.40% |
| S&P 500 | -10.21% |
| MSCI AC Asia ex-Japan | -13.32% |
| MSCI ACWI | -14.04% |
| MSCI Emerging Markets | -19.07% |
Source: FE Fundinfo. In US dollars. Year to 07 May.
Indeed, China has been popular among fund buyers in Asia, with several Asia-based fund selectors indicating that they will increase allocation to China equities in the next 12 months, according to Last Word Media research.
While US equities are less popular, fund selectors say they will continue to hold them over the next 12 months, the research shows. In addition, Asia’s wealth managers indicated that they prefer the US over other developed markets, including Japan and Europe.
Against this backdrop, FSA asked Fatima Khizou, London-based manager research analyst at Morningstar, to compare two US equity funds: the Franklin US Opportunities Fund and the Merian North American Equity Fund.
| Franklin Templeton | Merian | |
| Size | $3.7bn | $817m |
| Inception | 2000 | 2002 |
| Manager | Grant Bowers, Sara Araghi | Amadeo Alentorn, Ian Heslop, Mike Servent |
| Three-year cumulative return* | 46.78% | 11.40% |
| Three-year annualised return** | 12.43% | 3.58% |
| Three-year annualised alpha** | 7.26 | -1.35 |
| Three-year annualised volatility** | 20.69 | 18.57 |
| Morningstar analyst rating | Neutral | Silver |
| Morningstar star rating | **** | **** |
| FE Crown fund rating | ** | * |
| OCF | 1.81% | 1.57% |
Source: Morningstar, FE Fundinfo
* 05 May 2017 – 06 May 2020
**06 May 2017 – 01 May 2020
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