HEAD-TO-HEAD: GAM vs JP Morgan

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Both funds carry the three-star Morningstar rating. However, the GAM fund gets a Silver analyst rating, which signifies a highly-recommended product. The JPM fund is rated Bronze.

The analyst rating is forward-looking, while the star rating looks at historical risk-adjusted performance. Analysts assign the analyst rating on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating. A Gold, Silver, or Bronze rating means Morningstar analysts expect the fund to outperform over a full market cycle of at least five years.

“If we have to choose between the two, we would pick the GAM Star China Equity Fund,” said Share. “We like the manager a lot, he’s steered the fund very successfully over multiple market cycles.”

“We like that he runs the fund with conviction,” she added. “He is very willing to take a sector bet once he is confident that that’s where the opportunities are.”

Based on the long-term performance, the fund ranks first among all Chinese equity funds during the period ending 31 January, having delivered the average 8.62% annual growth according to Morningstar.

Due to their different investment characteristics and managers’ philosophies, the two funds will likely appeal to different types of investors.

“GAM Star China is definitely for investors with a  big risk appetite who could tolerate big swings in performance,” said Share.

“For investors looking for a core holding to get some exposure to China equities, the JPM fund would be more appropriate.”

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