HEAD-TO-HEAD: Stewart versus T Rowe Price

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Source: FE Fundinfo. Cumulative returns in US dollars.

Performance

The Stewart fund has generated a 48.3% three-year cumulative return, according to FE Fundinfo, which is slightly less than its MSCI ACWI benchmark (51.6%), but better than the average return of its peers (43.7%). The fund has been notably less volatile than both its benchmark and its international equity category during the same period. Its annualised volatility is 14.25%, compared with 20.12% for the MSCI ACWI and 18.75% for its sector average, FE Fundinfo data shows.

The strategy outperformed last year, but its underweight allocation to technology stocks in 2019 meant an annual return of less than half that of its sector average. On the other hand, the strategy has held up well during market downturns, and outperformed its benchmark and peers in 2018, and it also did well in 2016 when the market was flat.

“Performance was disappointing last year, but the fund typically resilient in down markets,” said Genderen.

“The strategy performed well in 2018, underlying its strength in falling markets, but it failed to keep up in 2019. This underperformance isn’t necessarily surprising, though, given the strategy’s cash level and its typical defensive traits,” he said.

The T Rowe Price fund has delivered a tremendous 80.7% three-year cumulative return, according to FE Fundinfo, which has in large part been achieve through a stellar 2020 when it posted 42.5% despite wild fluctuations in equity markets.

Indeed, fund manager Berg has “considerably outperformed the hard-to-beat MSCI ACWI Growth category benchmark over his tenure,” said Genderen. Over the same time period, the strategy’s risk-adjusted returns (as measured by Sharpe information ratios) also top the index and peer group, despite higher volatility (as measured by standard deviation.

“Throughout Berg’s tenure at the strategy, performance has been relatively broad-based,” said Genderen.

He invests more in emerging markets and mid-caps than rivals, which can add to the strategy’s risk profile, but this has been a positive for performance, Genderen noted.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 26 Aug 2021

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