The FSA Spy market buzz – 20 December 2024
Merry Christmas! The Year in Funds; Nuclear; Mag-7; Small Caps; Robotics; Bitcoin; Large Cap Growth; US Manufacturing; AI; Big Data; Lithium Batteries; Emerging Markets; Warfare and much more.
HEAD-TO-HEAD: Legg Mason vs Schroders
FSA compares two US equity funds with contrasting market cap styles: the Legg Mason Clearbridge US Large Cap Growth fund and the Schroder ISF US Small & Mid Cap Equity fund.
Conclusion
Legg Mason Clearbridge has achieved stronger three-year cumulative and annualised returns, and its managers have earned more alpha, than the Schroders fund.
However, that success has been gained with exposure to a higher level of volatility than the Schroders product.
Nevertheless, analysts at FE Analytics and Morningstar are more confident that the Legg Mason fund can outperform its benchmark and peers with an appropriate level of risk than can the Schroders fund.
FE Analytics awards it a five-crown rating and Morningstar assigns it four stars, compared with two crowns and three stars respectively for the Schroder fund.
The Schroders fund is more defensive and should provide downside protection, despite last year’s weak performance, according to Tambe. But, over the long-term, he can sleep easier with the Legg Mason Clearbridge fund.
“The US economy can support – and is sustained by – the powerful monopolies that comprise the large-cap universe,” he said.
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