HEAD-TO-HEAD: Morgan Stanley versus T Rowe Price

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Source: FE Fundinfo. Three-year cumulative returns in US dollars.

Performance

Both funds have posted strong long-term performances, yet they have delivered those returns in different ways.

The Morgan Stanley has had remarkably successful periods, but at the cost of other periods in the doldrums or falling backwards; the T Rowe Price has been more consistent.

“Absolute returns might be stronger at the Morgan Stanley fund, but risk-adjusted returns at the T Rowe Price fund are better and make me feel more comfortable as an investor,” said Poole.

The Morgan Stanley product has generated a three-year cumulative return of 162.17%, according to FE Fundinfi, outperforming by a considerable margin its Russell 1000 Growth Index benchmark (96.33%) and the average return by US equity funds available to Singapore retail investors.

The stellar performance is largely a result of the fund’s whopping 117.14% return in 2020, with the portfolio having exposure to lockdown beneficiaries such as Zoom Video Communications and Shopify. Other calendar years have been mixed, with the fund doing well in 2018 and 2017 compared with its peers, and less impressive in 2016 and 2019. So far this year, the fund is lagging its peers, generating a 13.93% return compared with 16.59% by its peers.

Indeed, its annualised volatility over the past three years is 31.09%, FE Fundinfo data shows, which is indicates the sharp fluctuations in the fund’s performance.

In contrast, the T Rowe Price fund “been a consistent and solid performer, regularly in the first or second quintile of its sector,” said Poole.

The strategy has posted an 85.97% three-year cumulative return, according to FE Fundinfo. Strong recent calendar years (relative to its peers and benchmark) include 2018 and 2017.

The fund struggles a littler in 2019, but it recovered well from the March 2020 market rout through good stock purchases. The strategy has maintained strong momentum this year, and is up 17.52%.

“It delivers good performance at a lower risk budget than the Morgan Stanley fund,” said Poole.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 28 July 2021

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