Manager review
Teera Chanpongsang has been managing the Fidelity fund since its inception in April 2008. He has been with the firm since 1994. Louisa Lo has been managing the Schroders fund since 2002 and has been with the firm since 1996.
Morningstar likes both Fidelity and Schroders fund managers.
“Teera Chanpongsang is very experienced. Chanpongsang also manages the Fidelity Southeast Asia fund, which is rated bronze [by Morningstar]. He had a good track record on funds previously managed by him, such as the India-focused and telecom funds, which outperformed their benchmarks under his management.”
According to FE Analytics, Teera Chanpongsang is an FE alpha manager, which is defined as an individual who has maintained a consistently high alpha score over a proven track record in rising and falling markets.
“The Schroders fund manager has a particular expertise in the Greater China region. She also manages the Schroder ISF China Opportunities, the Schroder ISF Greater China and the Schroder ISF Taiwanese Equity funds, which are all silver rated.”
Of the two products, the Fidelity fund has the bigger team with 40 people.
“Arguably it is the biggest Asia team that we have seen. But I would add their team has been less stable and they had a few departures. The team tends to be younger and average experience would be four-five years, much less compared to the Schroders team.”
The Schroders product has a stable team of 22 analysts with an average of 16 years experience, she said.
Fees
The total expense ratio or the ongoing charges for the Fidelity fund was 1.98% for the year ended 30 April 2014. The TER for the Schroders fund was 1.96% for the year ended 30 December 2014.
Fees for both products are in line with the category median of Asia ex-Japan equity funds, said Share.
Conclusion
Morningstar evaluates funds based on five pillars: people, process, parent, performance, and price, with analysts assigning a rating of positive, neutral, or negative to each pillar.
For the Fidelity fund, Morningstar is positive on all parameters, except for pricing, which gets a neutral rating. The Schroders fund gets a positive rating on process, people and parent and a neutral on performance and price.
Share added a caveat that the Fidelity fund is more volatile than the Schroders fund.
Morningstar rates both funds Bronze, and selection of one over the other depends on the investor’s preference for geographic exposure.
“If an investor is looking for a truly emerging Asia exposure, then maybe go for the Fidelity fund due to its higher exposure to India, Malaysia, Indonesia and Thailand.
“But if you are looking for emerging Asia with more developed market exposure, the Schroders fund has exposure to Hong Kong as well as South Korea and Taiwan,” she concluded.
