HEAD-TO-HEAD: HSBC vs Fidelity

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The three-year performance of the HSBC and Fidelity funds are close, with Fidelity slightly higher (see chart), according to FE data.

FE doesn’t have the performance figures for both funds’ benchmarks. It also does not have the performance for the Asia high yield sector in Hong Kong as there are only a few funds focusing on Asia high yield available for sale in the SAR, according to Ng.

In Singapore, there are 10 Asia high yield funds available for sale, which include both the Fidelity and HSBC funds. Therefore, in the chart, the Singapore Asia high yield sector is used for comparison.

According to Ng, although both the HSBC and Fidelity funds have similar performance, the HSBC fund would have the tendency to perform better in an upside market, but at the same time, it would probably do worse in a downside market.

“Because of [the HSBC fund’s] higher duration, it is more sensitive to the market, to interest rate cycles and the growth in the region,” Ng explained.

That explains why the HSBC fund’s decline after the November elections is steeper than that of the Fidelity fund.

However, HSBC is aware of the fund’s sensitivity to the market and the manager is prepared to adjust the duration if an event negatively impacts the market, Ng said, noting that he recently spoke to the fund’s investment team.

“But you shouldn’t expect that the duration will largely deviate from that of the benchmark,” which is around 4.3 years, Ng said, adding that the deviation will either be plus or minus one year.

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