HEAD-TO-HEAD: Fidelity versus Schroders

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Conclusion

“The Fidelity China Focus Fund continues to benefit from a capable portfolio manager, broad analytical resources, and a consistently applied investment approach,” said Share.

The product has a two-star rating from Morningstar, whose criteria is based on historical risk-adjusted returns. In addition, it has been awarded a silver analyst rating by the firm.

Under its enhanced rating methodology, which places an emphasis on fees and benchmark-relative performance, the strategy also earns a Morningstar analyst rating of silver on its cheaper share classes, while its more expensive share classes land at bronze.

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the fund just one crown.

The Schroder ISF China Opportunities Fund is better rated by both research firms.

“It benefits from a long-tenured Greater China equities expert and a time-tested investment process,” said Share.

Morningstar awards the fund four stars and an analyst rating of gold across all its share classes, while FE Fundinfo assigns it two crowns.

Share believes that the Schroder fund has more upside potential than the Fidelity product, especially in current markets where a growth style is more productive.

Nevertheless, the strong value tilt of the Fidelity fund, with its high weightings to the financial and energy sectors, means that it has a “role to play in an investor’s portfolio”.

“But overall, our strong conviction in Lo and her execution of a proven investment process makes the Schroder strategy one of our top picks,” concluded Share.

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