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HEAD-TO-HEAD: HSBC vs JP Morgan
FSA compares two Asian bond mutual funds from HSBC and JP Morgan.
Source: Morningstar
The JPMorgan fund was one of the first Hong Kong funds to be approved for sale in China via the Mutual Recognition of Funds (MRF) scheme, announced in July 2015. In its first full year of operation, the scheme proved very successful for JPMorgan, with the Total Return Bond Fund dominating the north-bound volume, accounting for about 90% of sales.
The sales peaked in August, and the trend reversed in the fourth quarter, broadly in line with the overall MRF sales.
The main reason behind this success in gathering assets is the first mover advantage, according to Yew.
China’s high savings rate, expectations of currency devaluation and capital flow restrictions created a fertile ground for an investment vehicle that offers Chinese investors safe exposure to US dollar bonds in a fund outside of the mainland.
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