Performance review
While returns are negative in the short-term, both funds have outperformed the benchmark index as well as the average returns for emerging market equity funds in the Singapore mutual fund universe. A look at various time periods until 31 July:
Source: FE Analytics
Likewise, both funds have fared better than the benchmark index and category over one- three- and five-year periods to 31 July:
Source: FE Analytics
“In relative terms, the Fidelity fund had a stronger run over the past five-year period, thanks to the stronger positive return in 2013 and better downside protection in 2011,” said Ng.
A look at calendar year returns:
Source: FE Analytics
“The Fidelity fund had been overweight consumer discretionary and technology names including some internet stocks that drove better performance in 2013,” said Ng.
“An underweight position on China in the 2013 dragged down the performance, but it was offset by an overweight position in Hong Kong.”
In 2014, both funds outperformed the benchmark, but the AB fund had a better return.
“A strong overweight position on India for the year could be one of the contributors, as Indian equities rallied when [Prime Minister] Narendra Modi came into power in 2014.”
Volatility of the two products also only shows a slight difference. A look at key volatility ratios for the three-year period to 7 August shows the AB fund is a little more volatile than the Fidelity fund:
Source: FE Analytics
