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HEAD-TO-HEAD: Alliance Bernstein vs JP Morgan

FSA compares the AB Japan Strategic Value Portfolio and the JP Morgan Japan (Yen) Fund.
by Fund Selector Asia

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To try to revive Japan’s sluggish economy, prime minister Shinzo Abe has implemented a set of economic policies to encourage private investment during his current term. The approach includes monetary easing, fiscal stimulus and structural reforms.

Among the latter is the corporate governance code, which is set to catch up with global standards in areas of board independency, stewardship practices and shareholder voting disclosure.

A key side-effect looks like being an indirect improvement in the competitiveness as well as profitability of Japanese businesses.

Meanwhile, in Japan, company management has been conservative in managing cash in general.

“A wide and effective deployment of their cash reserves will revitalise the market as a whole,” said Luke Ng, senior vice president at FE Advisory Asia.

At the same time, with the market gloomy for more than a decade, sell-side coverage on small- and mid-cap stocks became limited. Ng added that active managers are able to uncover many investment opportunities due to the market inefficiency.

Against this backdrop, FSA spoke to Ng to get comparative analysis on two Japan equity funds: the AB Japan Strategic Value Portfolio and the JP Morgan Japan (Yen) Fund.

 

AB Fund JP Morgan Fund
Size ¥27.46bn ($244.46m)

¥33.77bn ($300.64m)

Inception

 2006 1969
Manager Atsushi Horikawa

Shoichi Mizusawa, Nicholas Weindling,  Miyako Urabe

Annualised return*

 7.63% 17.43%
Alpha* -2.12

7.41

Volatility*

 15.57% 18.52%
FE Crown fund rating **

*****

Morningstar star rating

 ** *****
Morningstar analyst rating Neutral

Bronze

OCF

 2.43% 1.69%
Source: FE, fund factsheets, Morningstar
*Trailing three years to 5 October (last week-end)

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