HEAD-TO-HEAD: Gam versus Guinness

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Conclusion

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, assigns a four-crown rating to both the Gam and Guinness funds.

Morningstar has not awarded the Gam fund a star rating, and it assigns it a neutral forward-looking analyst rating. The Guinness fund is awarded four stars by Morningstar, but only merits a neutral analyst rating due to its relatively high fees.

“It’s really hard to choose between the two funds as they are both very good,” said McDermott.

“In performance terms they were pretty much neck-and-neck until the Guinness fund had a bad 2018 and, over the past three years it’s been the Gam fund that has taken the lead,” he said.

“This has had a cumulative effect on performance making the Gam product the better of the two on paper, although the Guinness fund has come back stronger this year,” he added.

In terms of geography, both have about 75% in the US, but the Guinness fund has more in Asia than the Gam fund. Sector-wise, the Guinness fund has slightly more in technology companies, but perhaps has more of a mix across other industries.

“If you want to invest in a fund that can take larger positions in its highest conviction stocks, the Gam fund will probably suit more,” said McDermott. “The Guinness fund may be more appropriate if you want more exposure to disruption in Asia.”

“But with just two stocks overlapping in their top ten holdings, arguably you could invest in both if you can’t decide between them,” McDermott concluded.

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