Posted inHead To Head

HEAD-TO-HEAD: Blackrock vs Schroders

FSA compares the BGF World Energy Fund and the Schroder ISF Global Energy Fund.
by Fund Selector Asia

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Conclusion

Ng noted that the Blackrock fund is included in FE’s portfolio of 100 recommended mutual funds available to investors in Hong Kong.

The recommendation is made based on the FE Crown Rating, which takes into account the fund’s performance, consistency and risk control. Before making a decision on inclusion of a fund in the Top 100 list, the research also considers qualitative factors, such as management changes.

Ng said the Blackrock fund achieves a balanced and diversified portfolio. The Blackrock fund is also the better of the two in terms of risk control, he said. The team attempts to maintain volatility around 20%.

The Schroders fund has more concentration risk than Blackrock due to its focus on oil production companies, leading to a relatively high correlation to volatile oil prices, he said.

Nonetheless, Ng said he does not have concerns about the Schroder fund’s investment philosophy and process.

For investors seeking long-term exposure in the energy sector, the Blackrock fund is the more suitable consideration of the two, Ng said. The Schroders fund can, however, be considered for a short-term tactical position for investors who seek to capture oil price upside, he added.

Both funds, Ng said, could act as diversifiers from other traditional equity investments.

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