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HEAD-TO-HEAD: JPMorgan vs MFS
Tags: European Equities | head-to-head | Jp Morgan Asset Management | MFS Meridian Investments
By Kate Lin, 13 Apr 18
FSA compares two European equity products: the JPMorgan Europe Dynamic Fund and MFS Meridian European Research Fund.
Pictured above: Samuel Meakin, Morningstar
Following the Brexit decision in 2016, which raised many questions for investors in Europe, upbeat market sentiment for European equities returned in 2017 due to some supportive macro-economic indicators.
The European equities fund category as a whole returned 26% in calendar year 2017, compared to 0.22% in 2016, according to FE data.
An easing of anxiety over Brexit and apparent signs of a continuing economic recovery in Europe also prompted Asian investors to allocate capital to European equity funds last year.
A general risk for European equities is the strengthening euro, according to Martin Todd, manager of the Hermes European Alpha Fund.
“One thing people have to be aware of is currencies,” Todd told FSA in a previous interview.
“The euro has strengthened quite considerably since the start of 2017 so a strong euro will make European exports more expensive. If you are making a lot of revenue in dollars, you don’t get as much in euro terms. That is a bit of a headwind for European companies in general.”
This year, one big event for Europe is the expected announcement to end quantitative easing.
Earlier this year, the European Central Bank reduced by half the monthly amount of bonds it buys through the quantitative easing program, to €30bn ($37bn), extending the purchases until September. Some analysts expect the ECB to wind down the program by the end of the year, but Todd believes it won’t have a significant impact on the market.
Quantitative easing in Europe hasn’t had clear benefits for the market, he said. “When you look at the numbers, some money has gone into Europe, but it hasn’t really moved the [stock market] much,” he said.
Against this backdrop, FSA talks to Samuel Meakin, London-based fund analyst at Morningstar, who provides a comparative analysis of the JPMorgan Europe Dynamic Fund and the MFS Meridian European Research Fund.
| JPMorgan Europe Dynamic Fund | MFS Meridian European Research Fund | |
Size | €1.53bn ($1.89bn) | €1.73bn ($2.13bn) |
Inception | 26 August 2004 | 19 August 2013 |
| Manager | John Baker, Jonathan Ingram, Anis Lahlou-Abid | Gabrielle Gourgey |
Morningstar Rating | **** | ***** |
| FE Crown Fund Rating | *** | *** |
| Fees (OCF) | 1.01% | 0.93% |
