Posted inHead To Head

HEAD-TO-HEAD: First State vs Schroders

FSA compares two mixed asset products — the First State Bridge Fund and the Schroder Asian Asset Income Fund.
by Francis Nikolai Acosta
Performance

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*All fund NAVs and sector performance have been converted to US dollars.

The chart shows the three-year performance of the funds and their sectors in both Hong Kong and Singapore, according to FE data.

Both the First State and the Schroders funds outperformed their peers in both Hong Kong and Singapore during the period, especially during 2016. In addition, the volatility of both funds is considered low, according to Yew. During the same three-year period, the First State fund’s volatility was 9.42 and Schroder’s was far lower at 5.98.

Head-to-head, the First State fund underperformed the Schroders fund because the equity sleeve had a pretty bad year last year, according to Yew.

“That was one of the reasons the fund’s overall performance was dragged down,” he said.

The Schroders fund performed better because of its ability to be less volatile, the result of currency hedging, Yew said.

“The Schroders fund had a strong year last year and one of the key contributors was currency hedging,” he said. “That added value to the fund, especially during the second half of the year when the US dollar appreciated strongly after the US elections.”

He added that since the Schroders fund is income-focused, its volatility is expected to be low because dividend-yielding stocks typically have low volatility.

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