The FSA Spy market buzz – 3 May 2024
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The Manulife fund severely underperformed in 2016, delivering a 5.59% loss, compared to a loss of 1.15% for its benchmark.
“It was expected, given that last year was a value rally,” said Share. “It was mainly the energy stocks and the material stocks that were outperforming, whereas this fund has more of a growth focus, so more focused on IT or consumer names.”
Some growth stocks also did well, but they were mostly in the large cap space, such as Alibaba, Tencent or Baidu. “Since this is a small cap fund, it was unable to participate in that large cap tech rally,” Share said.
The Manulife fund delivered a better performance than the Templeton fund in four out of nine calendar years since the latter fund’s inception: 2011, 2012, 2013, and so far in 2017.
The Templeton fund performed better in 2016 likely thanks to the value bias in some of the stocks the management team likes, Share said. “They try to buy stocks that are trading at a discount to their growth potential. In a value environment like last year, they’ve also done well.”
The Manulife fund shows a higher volatility, predominantly due to the high portfolio turnover, Share noted. “There’s a lot of market timing in there,” she said.
Manulife | Templeton | |
3-year return (cumulative) | -5.95% | 18.16% |
1-year return | 10.12% | 16.95% |
3-year Alpha | -5.17 | 2.71 |
3-year Beta | 1.03 | 0.85 |
3-year Sharpe Ratio | -0.01 | 0.32 |
3-year Volatility | 15.71 | 13.07 |
Annual turnover | 200% – 300% | 20% |
Catholic principles investment, Brown Advisory and ESG, Robotics and automation fun, China’s little bounce, Frontier investing excitement, Zero downside in wonderland, Bambu’s demise and much more.
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