HEAD-TO-HEAD: Morgan Stanley IM versus Pictet AM

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Performance

The Morgan Stanley fund has generated a 34.38% cumulative return during the past three years, outperforming its MSCI World index benchmark (22.63%) and its equity international fund sector average (12.50%), as well as the Pictet fund, which has only achieved a 19.88% return in US dollar terms, according to FE Fundinfo data.

The Morgan Stanley product has also been less volatile over the same period, with annualised volatility of 16.48%, compared with 20.97% for the Pictet product.

The two funds sit in different categories (the Morgan Stanley product is in the global sector, and the Pictet product is in the specialist consumer goods and services sector), but “you would expect them to behave in a similar way given their remits,” said McDermott.

However, “looking at discrete annual calendar years, what is obvious is that the Pictet fund outperforms more in strongly rising markets, while the Morgan Stanley fund holds up a lot better in tougher or negative markets,” he said.

Notably, the Pictet fund did better in last year’s bull market than the Morgan Stanley fund, posting a 29.61% return compared with 28.36%. Its relative performance was even stronger in 2017, when it was up 34.06% compared with a 25.12% gain by the Morgan Stanley fund.

On the hand, in market downturns the Morgan Stanley fund demonstrates its resilience, according to McDermott.

In 2018 it fell only 2.72%, when the Pictet fund declined 11.20%; in 2016 it was up 4.36% while the Pictet fund slumped 9.74%.

So far this year, the Morgan Stanley fund has again demonstrated resilience. It has fallen only 0.45%, compared with a 7.16% decline by the Pictet fund, according to FE Fundinfo.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars.

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