HEAD-TO-HEAD: Neuberger Berman vs Pictet

123456

Source: Morningstar

Both the NB and Pictet funds underperformed their benchmarks on a three-year annualised basis, according to data from Morningstar.

The NB fund, however, has outperformed the Pictet product and the benchmark year-to-date, Faassen noted.

“The outperformance is quite big. The NB fund’s underweight in Venezuela actually benefited the fund,” he said. The overweight in Argentina, Ecuador and Brazil last year also worked out well.

On the flipside, the Pictet product is having a hard time this year, Faassen said. “The reason is that they are being too cautious.”

Despite the fund’s flexibility, it is underweight local currencies in the portfolio because the team expected that the US dollar would strengthen. However, local currencies actually did very well, Faassen explained. “So they lost out on that.”

However, he said that the Pictet fund has done well in providing downside protection, adding that it can do better than the NB fund and benchmark in situations of market stress.

“The fund did well in 2008 when markets went sour. It also did well in 2011, given its ability to navigate through developed markets,” he said. “But that cautiousness backfired year-to-date.”

In terms of volatility, the Pictet fund is less volatile than the NB fund:

Volatility

Source: Morningstar

“Over the longer term, Pictet will have the lower volatility because of their very cautious approach to emerging markets,” Faassen said.

123456