HEAD-TO-HEAD: Neuberger Berman versus Pictet

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Conclusion

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the Neuberger Berman product two crowns, and rates the Pictet fund higher with three crowns.

Morningstar has awarded the Neuberger Berman product four stars based on historical returns, and with a silver analyst rating. The firm also gives the Pictet fund four stars, but a forward-looking analyst rating of only neutral.

“We have a higher level of conviction in the Neuberger Berman fund because of the stability of the management team,” said Kirwin.

Morningstar assigns its strategy both a people score of high and a process score of high, “because the team has consistently and successfully executed the same process for many years without disruptions,” she said.

For the Pictet fund, Morningstar currently rates both people and process as neutral, because “there have been substantial changes to the team within the past three years, which are matched by changes in the fund’s risk profile,” said Kirwin. “It has gone from a highly defensive fund to one more willing to embrace risks.”

Although, she notes that this “is not in itself a bad thing, it’s just a sign that this team is doing things a bit differently than were done in the past”.

“We need time to observe the new process and build conviction in it,” Kirwin concluded.

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