HEAD-TO-HEAD: Franklin Templeton vs OMGI

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Three-year performance of the funds and their benchmark, according to FE data.

The Templeton fund underperformed its benchmark, the Russell 3000 Growth Index, while the OMGI fund outperformed its benchmark index, the MSCI North America Index.

Khizou said that the Templeton fund underperformed its benchmark over three years because of underperformance in 2011-2012 and in 2016.

During 2011-2012, returns were hindered by poor stock selection within energy and consumer discretionary. However, it recovered in 2013 and 2015 because of the fund’s technology and consumer cyclical picks.

But the fund suffered again in 2016 from poor stock-picking, especially within the technology and healthcare sectors.

Khizou noted that the fund is recovering again this year and is benefiting from stock selection in technology and telecoms.

The OMGI fund has outperformed its index consistently, as well as all available passive funds tracking the index, according to Khizou.

Because of its quant approach, the fund was able to perform well during challenging periods. For example, despite investor concerns around the Greek debt crisis in 2015, the fund finished the year in the top quartile of its category.

The quant approach has also helped the fund mitigate volatility and large drawdowns in 2016, she added.

In terms of volatility, the Templeton fund is more volatile than the OMGI fund, according to FE data. Khizou said that one reason is its growth bias.

Source: FE Analytics

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