HEAD-TO-HEAD: Eastspring vs Henderson

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Returns of these two funds again differ because of their geographic focus, Ng said.

Over the three-year period, the Eastspring fund returned 18.54% versus Henderson’s 3.3% and the latter’s benchmark 7.15% in US dollar terms, as shown in the above chart from FE.

Looking at the five-year period, Eastspring also outperformed by gaining 37.79%. The Henderson fund lagged its benchmark by 6 percentage points, with a 26.46% of return during the period.

Ng said the Henderson fund manager sticks to the investment strategy. Ng saw no obvious reasons for the underperformance.

However, one factor to note is that both funds are not currency hedged and therefore present currency risk. “For example, in 2014 the Henderson fund fell 3.4% in US dollar terms and the performance was particularly hurt due to the exposure in Japan as the JPY depreciated over 12% against the USD,” he said.

“Over the same year, the Eastspring fund rose 13.64%, thanks to good stock selection in Thailand and the Philippines. For a similar reason, in 2013, when the Eastspring fund underperformed, it was mainly caused by the exposure in Thailand and Indonesia. Henderson rarely had considerable exposure in these emerging Asia markets.”

Although the Eastspring fund invests in emerging Asia, the volatility level is not significantly higher than the Henderson product, which focuses on developed regions.

Three-year volatility in terms of standard deviation is 16.4 for Eastspring and for Henderson, 12.5. The latter has a more concentrated portfolio, Ng explained.

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