HEAD-TO-HEAD: Blackrock versus Fidelity

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Source: FE Fundinfo. Three-year cumulative returns in US dollars.

Performance

The Blackrock fund has generated an 11.53% three-year cumulative return, which is less than its JP Morgan Asia Credit Index benchmark, but superior  inferior to the average performance of its Asian bond market peers, according to FE Fundinfo data.

It has delivered a solid performance year-to-date, up 3.56%, “but has been restrained by its low exposure to high yield bonds during the sector’s sharp recovery since April,” according to Poole.

Typically, credit selection has been the biggest positive contributor to the fund’s returns, while a shift from underweight to overweight positions in Philippines and Thailand investment-grade names in March and April added value, and overweight exposure to Indonesia and Indian investment-grade issues detracted, noted Morningstar.

Off-benchmark bets have added value over the long-term, but has meant that performance is sometimes volatile, with three-year annualised volatility of 6.40%, according to FE Fundinfo.

The Fidelity fund has benefited substantially from its flexibility to allocate away from its BofA Merrill Lynch Asia Dollar Investment Grade Index benchmark, as well as the JP Morgan Asia Credit Index.

It has achieved cumulative return of 18.17% during the past three years, and is up 6.95% in 2020, according to FE Fundinfo.

Volatility at 6.36% has been higher than the JP Morgan Asia Credit Index, as a result of the fund’s off-benchmark high yield credit bets and longer duration exposure, noted Morningstar.

However, “the strategy has rewarded investors for its credit selections and country allocations compared with other Asian bond funds,” said Poole.

Discrete calendar year performance

Source: FE Fundinfo. Returns in US dollars.

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