HEAD-TO-HEAD: Brown Advisory and Pictet

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Darius McDermott, Chelsea Financial Services

Introduction

With no signs of inflation abating, central banks have recently reinstated their hawkish stance to tighten monetary policy.

This has further dampened market sentiment on equities as investors brace themselves for more market volatility.

Credit Suisse’s global chief investment officer, Michael Strobaek, revised the house view on the asset class to “underweight” in late August.

“A slowing economy across geographies is exacerbating pressure on market dynamics and we think that risk assets, especially as they relate to corporate earnings, face further downward adjustments in the months ahead,” said Strobaek.

While the market is likely to continue to be volatile in the short term, Schroders and Fidelity are among the asset managers who are still confident in the long-term appeal of the asset class.

Under the current environment, Fidelity is focused on identifying stock-specific opportunities, which are names that “may have suffered from short-term headwinds but offer alpha potential for disciplined investors”.

“I have learned to adopt a long-term perspective towards the short-term uncertainties that weigh on investor confidence,” said Teera Chanpongsang, portfolio manager of Fidelity Funds – Emerging Asia Fund and Fidelity Asia Fund.

Chanpongsang’s view that investors should focus on long-term growth drivers is echoed by Alex Tedder, head and chief investment officer of global and US equities at Schroders.

“In this environment our focus is on pricing power,” said Tedder.

“Looking further out, long-term drivers of growth, such as climate change, are being overlooked. There are many opportunities for those with patience,” he added.

There are now 187 funds authorised for sale to Hong Kong investors, according to data provider FE fundinfo.

Despite posting a 25.05% cumulative return over the past five years, the funds have tumbled close to 20% over the last 12 months, according to FE fundinfo.

Against this backdrop, FSA asked Darius McDermott, managing director at Chelsea Financial Services to select two international equity products for comparison. He chose: the Brown Advisory Global Leaders Fund and the Pictet Global Thematic Opportunities Fund.

Source: FE Fundinfo, Morningstar. (Data in US dollars, 9 September 2022)

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