Posted inHead To Head

HEAD-TO-HEAD: HSBC vs JP Morgan

FSA compares two Asian bond mutual funds from HSBC and JP Morgan.
by Fund Selector Asia
Performance

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Source: FE

Over the three years to 15 March, the HSBC Asian Bond Fund outperformed JP Morgan Total Return Bond Fund, with a cumulative return of 11.61% vs 8.78%, respectively, according to data from FE.

Both outperformed the sector average for the period of 5.97%.

HSBC Asian Bond Fund JPMorgan Total Return Bond Fund Category average
3-year return 11.61% 8.78% 5.97%
Return since inception 5.68% 5.25%
Current yield 4.40% 4.85%

 

Since inception, the HSBC fund delivered a 5.68% average annual return vs the 3.81% category average (187 bp difference) and the 3.55% return of its benchmark (213 bp difference). The fund’s current yield is 4.40%.

The JPMorgan fund delivered 5.25% since inception, 125 bp better than the category average, while staying within its 3-6% volatility target. Its current yield is higher than HSBC’s, at 4.85%.

The HSBC Asian Bond Fund performed better in 2010, 2011, 2014 and 2015, while JPMorgan Total Return Bond Fund did better in 2012, 2013 and 2016.

The underperformance of JPMorgan Total Return Bond Fund in 2015 can be attributed to local currency duration positioning and exposure to convertible bonds, Yew said.

“It had significantly higher non-US dollar exposure than the HSBC Asian Bond Fund. The RMB devaluation in August 2015 led to volatility of Asian currencies, which in turn had a negative effect on the fund.”

In 2014, the JPMorgan fund would have been underweight in “US dollar duration”, thus did not benefit as much as the HSBC fund from the declines in US treasury yields, Yew explained.

 

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