Manager Review
Jing Kang has been the manager of the China Merchants Antai fund since August 2015, while Weiqing Cai has been managing the UBS SDIC fund since March 2015, Wu said.
When comparing the profiles of the two managers, Cai has 12 years of experience in equity investment, which is higher than the industry average, she said.
“While Cai has less than two years of managing this fund, she is very experienced in bond investments. She previously worked at securities houses, banks and insurance companies and has strong knowledge of credit bond investment.”
For the UBS SDIC product, Kang has five years of investment experience, but has only been managing funds for one year, Wu said.
Before working as a fund manager, Kang previously analysed bonds, which include treasury bonds, policy finance bonds and central bank notes.
“Kang is also experienced in analysing the macroeconomic situation and [in particular] he is sensitive to the impact on investment from interest rate changes.”
Fees
The annual management charge (AMC) of both the China Merchants Antai fund and the UBS SDIC fund are 0.6%, Wu said.
The custodian fee of the China Merchants Antai fund (0.18%) is slightly lower than that of the UBS SDIC fund (0.2%).
Despite carrying the same AMC today, the China Merchants Antai fees have historically been lower than its peers, while the UBS SDIC fees have tended to be in line with the average, Wu said.
Conclusion
Both funds mainly invest in bonds, have strict controls on risk management and are suitable for investors as a core allocation of their assets, Wu said.
When comparing performance over the past year, the UBS SDIC fund is faring better than the China Merchants Antai fund. Given that much has happened in China markets since 2015 — the the surprise RMB devaluation, the massive stock selloff and regulatory missteps — the one year performance of the UBS SDIC product suggests that Kang has some ability to deliver performance despite market turbulence.
“We like the UBS SDIC product more, as it provides a better performance. However, investors should be aware of the higher risk of the fund as well, as it has a strong focus on credit debt, meaning that it has higher volatility than the China Merchants Antai fund,” she said.
The China Merchants Antai product has a more diversified asset allocation, which is good for providing stable growth in the long term, she said.
