Posted inHead To Head, News

HEAD-TO-HEAD: Neuberger Berman vs Pictet

FSA compares two global emerging market bond funds: the Neuberger Berman Emerging Market Debt Fund and the Pictet Global Emerging Debt Fund.
by Francis Nikolai Acosta
Conclusion

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The NB fund receives a Morningstar analyst rating of Silver and a five-star rating, while the Pictet fund receives a Bronze analyst rating and a four-star rating.

The analyst rating is a forward-looking analysis of a fund, while the star rating looks at historical risk-adjusted performance.

Faassen believes that both funds are more suitable as supporting products in a bond portfolio and not as core holdings, given the high risk in emerging markets.

For the Pictet fund, which offers downside protection, investors should be aware that it takes on local currency debt. “So there’s local emerging market foreign exchange risk as well.”

Faassen declined to comment whether he prefers one fund to the other, but elaborated on the analyst ratings.

“If you look at the NB fund, it has a higher Silver rating, which we think makes it a better candidate within the emerging market bond category. Pictet has a Bronze rating, because we don’t see it as a pure emerging market debt player,” he said.

However, he acknowledged that it may be unfair to compare the Pictet fund in the emerging bond category given its leeway to invest in developed markets.

Faassen further noted that there is no fund that is rated Gold in the category, making the NB fund one of the highest rated funds.

“NB has a Silver rating, so that is like we are saying that this is a better choice in the category.”

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