HEAD-TO-HEAD: Bosera versus Huatai-Pinebridge

A plethora of A-share passive funds are on offer to investors in Asia. Among the China funds authorised for sale in Singapore and Hong Kong, 73 of them are ETFs. Because there are so many, these undifferentiated products have a tendency to be delisted.

Providers of China-focused ETFs usually take exposure to the A-share index, with a heavy weighting in Tencent and Alibaba and China’s big state banks, according to Premia Partners’ managing partner Rebecca Chua, who is one of the voices criticising the lack of diversity among China ETFs.

Additionally, Chinese equities, particularly China A-shares, have become one of the worst performing asset classes in Asia this year.

Sentiment toward the asset class has been down due to issues such as the trade conflict with the US and GDP growth downward revisions.

Year-to-date, the CSI 300 Index is down -22.79%, compared to the MSCI AC Asia (ex-Japan)’s -13.17% in US dollar terms, according to FE data.

Passive products that hug indices have obviously followed those indices down.

However, sentiment could be turning. Asia’s fund selectors have shown an increasing interest in buying Chinese equity funds in the next 12 months, according to data collected by FSA.

Against this backdrop, FSA asked Andy Huang, Shenzhen-based manager research analyst at Morningstar, to compare and explain the differentiation between two China-focused passive products: the Bosera Yufu CSI 300 Index Fund and the Huatai-Pinebridge Quantitative Enhanced Index Fund.

Both funds are available in Hong Kong via the Hong Kong-China Mutual Recognition of Funds scheme.

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	Bosera	Huatai-Pinebridge
Size	RMB 6.01bn ($880m)	RMB 5.49bn ($790m)
Inception	2003	2013
Manager	Gui Zhenghui	Tian Hanqing
Three-year cumulative return*	3.3%	3.2%
Three-year annualised excess return*	6.62%	6.87%
Three-year annualised alpha*	6.40	6.82
Three-year annualised volatility*	18.43	19.08
Morningstar star rating	*****	*****
TER	0.60%	0.63%

Source: Morningstar. Data are in Chinese renminbi

*1 November 2015 – 31 October 2018