Waddell & Reed Advisors Global Growth Fund performance
In this article, we’ll outline the performance of the Waddell & Reed Advisors Global Growth Fund – Class A (UNCGX), which is one of the classes available for retail investors. The fund invests in stocks of companies like Koninklijke Philips (PHG), Hilton Worldwide Holdings (HLT), Kansas City Southern (KSU), Alibaba Group Holding (BABA), and Bristol-Myers Squibb (BMY), among others.
From a purely NAV (net asset value) return standpoint, the UNCGX had a good one-year period until February 29, 2016, as well as a good 2015 compared to the peers chosen for this series. For return comparison, we have chosen two ETFs: the iShares MSCI ACWI ex U.S. ETF (ACWX) and the Vanguard FTSE All-World ex-US ETF (VEU). To evaluate benchmark-related metrics, we’ve chosen ACWX as the benchmark for all funds in this review, as it tracks the MSCI All Country World ex-U.S. Index.
The UNCGX’s standard deviation, or the volatility of returns, in the one-year period until February 29 was 16.1%. This is higher than both the ACWX’s 15.4% and the peer group’s average of 15.7%.
The fund’s risk-adjusted returns, calculated via the Sharpe Ratio, were negative for the one-year period ended February 29. Evaluating a negative Sharpe Ratio may be misleading, so we’ll avoid that. The ratio stood at 0.39 for 2015, placing it fourth among its peers.
The information ratio, calculated with ACWX as the benchmark, was 0.59 for the one-year period ended February 29, placing it tenth among its peers. The information ratio shows the consistency of fund managers and their ability to generate excess returns over a benchmark. The higher the reading, the better the consistency. For 2015 as well, the fund’s information ratio had placed it tenth among its peers.
A note to investors
The alpha generated by the UNCGX placed it as a below-average performer for the one-year period until February 29, 2016. For 2015, this measure placed it fourth among its peers. Given its substantial exposure to US equities, the fund is less affected by US markets compared to other funds in this review. Investors who already have substantial exposure to US equities might not be interested in this fund.