HEAD-TO-HEAD: Allianz versus JP Morgan

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Conclusion

Morningstar has awarded the Allianz fund five stars based on historical returns, and a bronze analyst rating. The firm rates JP Morgan fund the same with five stars, and a forward-looking analyst rating of silver.

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the Allianz fund five crowns and also five crowns for the JP Morgan fund.

Morningstar said it remains confident in JP Morgan Pacific Equity’s “strong leadership, deep supporting cast, and well-structured, consistently applied investment approach”.

“We think the investment process is well qualified and highly disciplined. We like the teamwide research framework. It not only helps the portfolio manager in selecting the stock ideas, but it is also an important resource in determining the portfolio construction,” said Liang.

For example, the team has an internal positioning sizing guideline based on the stock’s strategic classification, so the least risky and higher quality names will normally get larger active weightings. This provides comfort from a risk management perspective.

The Allianz Oriental Income fund also has several attractive attributes, including a highly experienced and long-tenured lead manager as well as a differentiated, consistently applied investment approach, according to Liang.

“The investment process is definitely sensible and also differentiating, given that it is a truly all-cap strategy,” she said.

“But we think it’s embedded with a higher key person risk [than the JP Morgan fund] as the investment approach is dependent on the managers’ execution. We are also keeping an eye on the strategy capacity, giving that it is a small and mid-cap buyer,” Liang said.

But overall, Morningstar thinks that the Allianz fund is also a “good and differentiated Asia Pacific equity offering”, especially for investors with a higher risk preference.

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