Posted inHead To Head

HEAD-TO-HEAD: Merian versus Schroders

FSA compares two UK equity products: the Merian UK Alpha Fund and the Schroder ISF UK Equity Fund.
by Rupert Walker

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Introduction

There have been better alternatives than the UK stock market for dollar-based investors during the past few years.

Sluggish economic performance and protracted Brexit instability has led to underperformance against other equity markets, and a chaotic policy response to the Covid-19 pandemic has meant that recovery from the late-March nadir for risk assets has lagged other indices.

While the MSCI All Country World Index has bounced back vigorously from the February-March shock, and has a cumulative three-year return of 26.42% in US dollar terms, the FTSE All Share Index is still in the red, down 9.07%, according to FE Fundinfo.

The poor relative return is equally stark over a longer period. The UK benchmark is down 0.24% over five years and up an anemic 40.97%, compared with the broadly-based MSCI benchmark, which has risen 61.97% and 147.16% respectively, FE Fundinfo data shows.

Clearly, it’s been a tough decade for UK equity fund managers, but Darius McDermott, managing director of Chelsea Financial Services, compares for FSA a couple of products run by two of the best-regarded managers in the sector: the Merian UK Alpha Fund and the Schroder ISF UK Equity Fund.

Merian Schroders
Size $44m $72m
Inception 2013 2001
Managers Richard Buxton Alex Breese
Three-year cumulative return -14.08% -27.96%
Three-year annualised return -5.52% -10.83%
Three-year annualised alpha -4.18 -4.81
Three-year annualised volatility 24.75% 25.17%
Three-year information ratio -0.57 -1.09
Morningstar star rating *** –
Morningstar analyst rating Silver –
FE Crown fund rating * *
OCF (clean share class) 1.95% 2.34%
Source: FE Fundinfo, Morningstar. (Data in US dollars, 18 September 2020)

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