Are Asia’s fund selectors good at choosing funds?

Asset Class in Focus

Some preliminary data is in, and the results are ripe for discussion.

How have private bank and wealth manager predictions of individual fund performance actually turned out? FSA’s Fund Management Awards have data that can be something like a report card for the region’s fund selectors.

FSA’s annual fund awards are free of charge (no pay-to-play) and emphasise objective methodology:

Fund selectors from banks and wealth managers are given a shortlist based on quantitative criteria, crunched by data partner FE. Using the shortlist, fund selectors and their teams choose the fund they believe will outperform peers in the next 12 months.

The 2019 awards voting finished in December. Seven months later, we looked at the returns of the award winners and found almost every fund selected as the future out-performer has beat both the sector and benchmark year-to-date (table below).

Almost every fund selected as the future out-performer has beat both the sector and benchmark year-to-date

The singular exception was the Invesco Consumer Trends Fund, which has returned 21.95% versus the sector (22.91%). However, the product did beat the benchmark return of 21.05%.

The time frame for predicted out-performance — 12 months — has another volatile five months to go.

However, the preliminary results highlight the regional expertise of the fund selectors and their teams, as well as the substance of the FSA fund awards.

 

 Fund award winners in Hong Kong, YTD*

 

Category

 

 

Platinum winning fund

 

FundSectorBenchmark
Asia Pacific EquitySchroder ISF Asian Opportunities15.3%12.6%9.94%
Emerging Market BondT. Rowe Price Emerging Markets Bond12.2%9.24%
European EquityMFS Meridian European Value17.03%13.8%15.6%
Global BondPimco GIS Global Investment Grade Credit9.28%6.14%9.06%
Global Emerging Market EquityHSBC GIF Emerging Wealth20.26%12.9%18.26%
Global EquityMorgan Stanley Global Opportunity26.6%16.7%18.26%
Greater China/China EquityInvestec All China Equity23.7%19.6%21.1%
High YieldValue Partners Greater China High Yield Income8.52%7.8%
Japanese EquityFidelity Japan Aggressive13.8%8.75%7.95%
Mixed AssetCapital Group Global Allocation (LUX)13.16%9.66%18.26%/5.05%*
Regional BondBEA Union Investment Asian Bond and Currency7.8%7.79%
Regional/Single Country Emerging Market EquityJ.P. Morgan Vietnam Opportunities11.5%11.35%
Sector EquityInvesco Consumer Trends**21.95%22.91%21.05%
US EquityMorgan Stanley US Advantage30.29%21.49%21.86%

 

Source: FE. In US dollars. SFC-registered funds. Year-to-date return to 29 July 2019. Where the benchmark performance is not given, either the fund does not use a benchmark or it is not available in FE database.
*The fund uses two benchmarks, one for equities (18.26%) and one for bonds (5.05%)
**Renamed from Invesco Global Leisure in December 2018

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