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HEAD-TO-HEAD: Fidelity vs Haitong

FSA compares two Asian high yield bond funds with sharply contrasting strategies and profiles: the Fidelity Asian High Yield Fund and the Haitong Asian High Yield Bond Fund.
by Rupert Walker

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Conclusion

Ng has no doubts about which fund he prefers.

“Fidelity is better diversified, less volatile and achieves superior returns. Perhaps, most importantly, the fund is what it says on the tin: an Asian high yield fund,” he said.

The fund is also extremely well supported by analysts and other staff. Its $4bn size – it is now soft-closed – might cause some liquidity concerns because the Asian high yield bond market is small and many issues tend to be locked away until maturity.

On the other hand, its size means it is in a powerful bargaining position in the primary market. Lead managers of new issues will usually need to ensure pricing is satisfactory to Collins and his team, and that the fund will receive its allocation of bonds.

The Haitong fund might be a suitable consideration for investors with an especially bullish view on the China property sector. However, “there are other funds explicitly dedicated to that sector which might be a better option,” Ng said.

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