HEAD-TO-HEAD: Fidelity versus Mirae Asset

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Andrew Daniels, Morningstar

Introduction

2018 was for a down year for key equity markets, especially for Asia, which lagged global and US markets, according to FE data. Although markets have recovered, Asia equities have continued to lag global peers.

Performance (%)

Source: FE

“Obviously, the market environment in 2018 did not help the demand for Asia equity funds, so we’ve seen some outflows there, Andrew Daniels, Hong Kong-based senior analyst for equity strategies manager research at Morningstar, told FSA.

The asset class has had continued outflows, driven by institutional investors, according to a recent Evestment report. Last quarter, institutions globally withdrew around $670m from Asia-Pacific strategies. During the last four quarters, total outflows amounted to $14.5bn.

The continued trade dispute between the US and China is also a factor. One month ago, Bank of Singapore reduced its Asia equity weighting because of the more confrontational nature of the trade war.

“We remain cautious about equity markets in general going forward, and believe that emerging markets are especially vulnerable,” Rajeev De Mello, BOS’ chief investment officer, said recently.

Against this backdrop, FSA asked Morningstar’s Daniels to compare two Asia (ex-Japan) equity products: the Fidelity Asia Focus Fund and the Mirae Asset Asia Sector Leader Equity Fund.

Source: Morningstar and FE. In US dollars

*30 May 2016-30 May 2019

**28 May 2016-24 May 2019

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