HEAD-TO-HEAD: Bosera vs E Fund

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The three-year growth chart for the Bosera and E Fund products versus the category, according to Morningstar.

Performance

Both funds have performed differently depending on which asset classes performed well during a particular calendar year, Wu said.

Although the majority of both funds are invested in fixed income, Wu noted investors should look at the asset allocation of the equity sleeve as well because both asset classes can be performance drivers.

For example, onshore Chinese equities underperformed this year compared to last year, which led to negative returns for the E Fund product.

However, the Bosera Fund posted positive returns because of exposure to policy bank bonds, according to Wu.

Discreet calendar year performance

Source: Morningstar

“The policy bank bond assets contributed a lot to the Bosera fund’s performance this year,” Wu said.

However, the same asset class led to negative returns last year as policy bank bonds underperformed.

Turning to the E Fund vehicle, she said that equity exposure was a key driver, adding that the fund performed well during the growth stock rally in 2014 and 2015.

Wu added that both funds have high volatility. The three-year annualised volatility for the Bosera fund is 7.39, while E Fund’s volatility is 11.18.

Wu explained that the E Fund’s volatility is higher is due to its exposure to growth stocks, which are more volatile than other stocks in the onshore market.

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