HEAD-TO-HEAD: Blackrock vs JP Morgan AM

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Andrew Daniels, Morningstar

Introduction

Global emerging market equities rebounded strongly last year. For the full year 2019, the MSCI Emerging Markets Index returned 18.52%, which compares to -9.73% in 2018, according to data from FE Fundinfo.

“It was an interesting year, in which the asset class started to perform positively after a huge sell-off at the end of 2018,” said Andrew Daniels, Hong Kong-based senior analyst for equity strategies manager research at Morningstar.

However, between emerging market equity funds and bond funds, investors in Asia-Pacific preferred the latter. In general, fixed income funds were clear winners, as investors were concerned over a global economic slowdown and risks associates with the China-US trade war.

In fact, all top 10 emerging market funds in Asia- that had the highest inflows last year ending October were fixed income funds, with net inflows of around $5.4bn, according to a recent Cerulli Associates report.

On the flipside, the report highlighted that six of the bottom 10 emerging market funds during the same period were equity funds.

However, there are signs that emerging market equity funds should see inflows this year. For example, private banks operating in the region are expected to increase allocation to global emerging market equity funds in the next 12 months, according to a recent Last Word Media research.

Against this backdrop, FSA asked Morningstar’s Daniels to compare two highly- rated global EM equity funds: the Blackrock Emerging Markets Fund and the JP Morgan Emerging Markets Equity Fund.

Source: Morningstar, FE Fundinfo

*6 January 2017 – 8 January 2020

**7 January 2017 – 3 January 2020

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