HEAD-TO-HEAD: Columbia Threadneedle vs Invesco

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Luke Ng, FE Advisory Asia

Introduction

Asia-Pacific equities are underperforming in 2018, pulled down by China, which accounts for about one-third of the MSCI AC Asia Pacific (ex-Japan) Index.

Year-to-date, the index has returned -6.94% compared to the same period in 2017, when it returned 25.3%.

In addition, this year Asia-Pacific stocks have underperformed the 1.43% return of the broader MSCI World Index.

Fund managers attributed the sluggish performance to weaker market sentiment mainly caused by the US-China trade tensions.

Because of this, Blackrock has reduced its China equities position, according to Wenjie Lu, China investment strategist. “[The trade tension] obviously has added a lot of pressure to Chinese assets,” he said.

DWS is more optimistic and remains overweight China equities despite the uncertainty, according to Sean Taylor, the firm’s chief investment officer for Apac and head of emerging market equities.

Taylor’s rationale for the overweighting is that local investors continue to support domestic markets across Asia. As an example, he said the amount of mainland money brought to Hong Kong via the southbound Stock Connect has been increasing.

Although the Hong Kong bourse began to see outflows this year, the southbound investor participation should remain active over the medium term, he believes.

Against this backdrop, FSA talked to Luke Ng, senior vice president at FE Advisory Asia, who provided comparative analysis of the Invesco Asia Opportunities Equity Fund and Threadneedle Asian Focus Fund.

Data: FE, fund fact sheets

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