FSA took a quick look at SFC-registered actively-managed Greater China funds, comparing their cost (OCF) against outperformance, measured by the three-year alpha.
Out of the 45 funds, 14 products have OCF above the median of 2.01%, while 31 of them are below the median.
There appears to be a rough correlation between high fees and low alpha. A larger percentage of the funds with above-median OCF had three-year alpha lower than 2.27, the median for the category, the data show. Only 35% of them have alpha higher than the median.
On the flip-side, 54% of the less expensive funds had alpha higher than 2.27.
Greater China funds
| Alpha above median | Alpha below median | Total | |
| OCF above median |
5 |
9 |
14 |
| OCF below median |
17 |
14 |
31 |
Source: FE Analytics. All fund NAVs were converted to US dollars for comparative purposes.
The data also show that 14 out of the 21 funds that have OCF below 2%, had alpha higher than 2.27.
In addition, two funds with the highest OCF had negative alpha, while four funds with the lowest OCF had alpha greater than 3.
Top five funds with highest OCF
| Fund |
OCF |
Three-year cumulative alpha |
Three-year cumulative return |
| Hamon Greater China in US |
4.51 |
-2.52 |
4.96 |
| GF China Growth in US |
3.77 |
-6.91 |
-1.26 |
| AB FCP I China Opportunity Portfolio TR in US |
3.43 |
0.33 |
7.23 |
|
Value Partners China Convergence in US |
3.16 |
2.5 |
9.68 |
| Manulife Greater China Opportunities TR in US |
2.66 |
3.58 |
10.22 |
Top five funds with lowest OCF
| Fund |
OCF |
Three-year cumulative alpha |
Three-year cumulative return |
| JPMorgan Provident Greater China in US |
1.04 |
3.47 |
9.77 |
| JPMorgan SAR Greater China in US |
1.14 |
4.1 |
10.49 |
| Value Partners Classic in US |
1.58 |
5.4 |
12.56 |
| First State Greater China Growth TR in US |
1.6 |
5.87 |
11.58 |
| GAM Star China Equity in US |
1.63 |
-0.26 |
7.32 |
