Fidelity Global Multi Asset Income Fund Vs Dimensional World Allocation 60/40
Fidelity Global Multi Asset Income is a popular fund.
It is also on DBS's fund select list as a global balanced fund to choose from.
If you haven't seen the DBS fund select list, this is how it looks.
In this post, you see comparisons also with Dimensional World Allocation 60/40 fund which is gaining in popularity as a low cost and diversified investment solution!
Footnote: DBS FST Fund Ratings The DBS FST currently covers over 300 funds. The team will review and assign an appropriate rating to each fund.
This rating reflects the team’s assessment of the fund’s competitive advantage and represents the level of conviction that the team has with respect to the fund performing well relative to its peers and its assigned asset class benchmark over the next 18 to 36 months.
Investors should, however, note that the DBS FST Fund Rating is not a view on funds as an asset class nor is it a guarantee of a fund’s performance.
Strong correlation of performance between the funds
This is a 3year chart plotted for the 4 global funds and Dimensional world allocation 60/40 GBP (because it had a 3y record).
You'd realise strong correlation and that Jan2019 was a bad period for all funds.
While Fidelity Global Multi Asset Income is rated *** only in the list above, it arguably had a good 4.45%p.a with a lower volatility. This meant that price movements were more stable than the other funds.
Hence, I'd favour it abit more and would use it to compare against Dimensional World Allocation 60/40 as a globally diversified investment approach.
1y chart between Fidelity Global Multi Asset Income and Dimensional World Allocation 60/40 GBP
GBP in the last 1 year was actually very stable vs SGD. Hence, fund performance was not varied much by currency factor. Below is a chart on GBPSGD.
Dimensional World Allocation 60/40 GBP outperformed slightly but had more volatility.
More on Fidelity Global Multi Asset Income
From the investment objective on the factsheet.
This fund may invest globally, it may be exposed to countries considered to be emerging markets. The fund may tactically invest up to 50% of its assets in global government bonds.
It may also have an exposure of less than 30% of its assets to each of the following asset classes, infrastructure securities and eligible closed-ended real estate investment trusts (REITS).
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Currently, Fidelity Global Multi Asset Income has only 30%+ is invested into equities and more than 60% is into bonds.
This is the reason for its more stable performance.
Average credit rating of the bonds is BBB which is investment grade. Average duration is 5y.
Deep dive into Dimensional World Allocation 60/40
Dimensional World Allocation 60/40 achieves remarkable diversification.
It has more than 13,000 equity holdings and more than 700 bond holdings.
Percentage of top 10 holdings owning less than 10%.
For the bond section, it looks to be a short duration approach with 2.06% average duration.
Below is it quarterly performance for the GBP demoninated.
To avoid currency risk, you could choose the SGD class one that was launched only in 2019.
Conclusion
Both funds are suitable for a global approach. Dimensional World Allocation 60/40 has a higher equity allocation currently than Fidelity Global Multi Asset Income.
Dimensional funds are known for it's low cost. As stated in the factsheet, the Dimensional World Allocation 60/40 annual management charge is 0.33% only.
But as to which fund is better, it probably depends on which style of investing do you believe in more.
Last updated on July 16th, 2020 at 09:10 am
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