In a very tough year for asset management, the awards have particular resonance. We believe singling out the top performers based on independent, data-driven criteria can provide a fund house with a valuable distinction among its peers and help distributors to get consumer support.
To determine winning funds, FSA uses historical and forward-looking screens — both quantitative and qualitative methods of selecting the winners.
How it’s done
FSA’s awards are based on data from FE Advisory Asia, which filters the universe of funds in Hong Kong (1341 eligible funds) and Singapore (2490 eligible funds) for alpha, volatility and consistency across 15 categories. FE then creates two shortlists – one for Hong Kong and a separate one for Singapore.
(In Hong Kong, funds have to be registered for retail sale to be eligible. In Singapore, funds with “Accredited Investor” status are eligible).
The methodology for the shortlists is 100% quantitative, providing an apples-to-apples comparison, according to Luke Ng, senior VP of research at FE Advisory Asia.
Fund selector judges
Next, the shortlists are given to independent panels of well-known professionals from Asia’s fund selector community. Hong Kong and Singapore have separate judging panels to reflect the difference in offerings.
FSA provided only one question to guide them, and it was forward-looking:
Given this list, which fund within each asset class do you think will perform best over the next 12 months?
The judges’ selections will determine the winners (Platinum and Gold). Winners will be revealed in early January.
Asia fund trends
After compiling the shortlists, the team at FE noticed a few trends that give a snapshot of the regional fund landscape.
Across all categories, Hong Kong’s shortlist comprises 133 funds. Roughly 45% of funds from last year’s shortlist managed to get on this year’s shortlist, indicating that nearly half the products continued to perform well, Ng said.
In Singapore, the shortlist is made up of 145 funds. But there was much higher turnover with about 17% from last year’s shortlist reappearing this year.
“This reflected a more intense competition in Singapore than in Hong Kong,” Ng said. “More funds and asset managers are competing in this universe.”
He also noted that small and mid-cap equity funds performed well across different categories in both jurisdictions.
The most competitive categories in Singapore were the regional bond, mixed asset and global equity categories.
Hong Kong was different. The most competitive categories were Greater China/China equities, European equities, Asia-Pacific equities and the large category of regional/single country emerging market equities.
“The internal score at the high end of the shortlist for these categories was quite close.”
In the coming days FSA will publish the shortlists, one for Hong Kong and one for Singapore, and winners will be revealed in early January.