Posted inHead To Head, News, Research

HEAD-TO-HEAD: Aberdeen vs Matthews Asia

FSA compares the Aberdeen Global Indian Equity Fund and the Matthews Asia India Fund.
by Fund Selector Asia

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Conclusion

“In the long run, both funds are quality vehicles to invest in India,” said Ng.

Since the Aberdeen fund invests in companies for the long term, it is suitable for investors who share this long-term approach. The investors should be comfortable with holding on to companies that the mangers deem to be of good quality through thick and thin, as they weather market cycles and difficult times.

“If you want a fund to serve as a core position for the long term, consider the Aberdeen fund,” Ng said. “Because the team has a strong focus on quality and sustainable earnings, the fund tends to underperform in up markets, but it tends to provide better downside protection when the market doesn’t perform well.”

The Matthews Asia fund, by comparison, has a higher exposure to small- and mid-caps, which brings its own risks and rewards. Small- and mid-cap stocks tend to be more volatile, but the team has managed to control the volatility of the portfolio and keep it in line with that of Indian equities as a whole, Ng noted. “It is quite impressive,” he said.

“There are a lot of stock-specific opportunities in India in small- and mid-caps,” he added. The Matthews Asia fund has been doing well in stock selection and offers a good alternative consideration for investors who want to tap into these opportunities and who understand the risks, Ng said.

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