HEAD-TO-HEAD: Blackrock vs JP Morgan AM

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The Blackrock and JP Morgan funds versus their benchmark index, the MSCI Emerging Markets Index, and the sector in Hong Kong. Source: FE Fundinfo. In US dollars.

Performance

Daniels said he is confident that both the Blackrock and JP Morgan funds will be able to outperform the emerging markets index and peer fund average over the long-term.

However, he believes that the Blackrock product’s performance is less predictable than the JP Morgan fund’s.

“The Blackrock manager expects to outperform in all market environments, so it really depends on the manager’s skill in finding opportunities.

“Given that flexible approach, it does not have much of a predictable performance.”

Turning to the JP Morgan fund, Daniels said its performance is more predictable given its quality growth bias.

“The JP Morgan fund will tend to do well in a growth-led environment, and will also provide downside protection when the markets are down because of its quality bias.

“But perhaps it will not do well when value leads the way,” he said.

Discreet annual performance (%)

Source: FE Fundinfo. In US dollars.

In terms of volatility, both the JP Morgan and Blackrock funds are more volatile than their benchmark index and sector on a three-year annualised basis, according to data from FE Fundinfo.

Three-year annualised volatility

Source: FE Fundinfo.

While the JP Morgan fund is more volatile than the Blackrock product during the period, Daniels expects that it should be less volatile longer term.

“I expect the Blackrock fund to be more volatile just because it has higher turnover as the manager is trying to exploit different macro opportunities at different points in time, so you will see frequent shifts in the portfolio,” he said.

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