HEAD-TO-HEAD: Fidelity vs Pinebridge
By Rupert Walker, 24 May 19
FSA compares two Greater China equity products: the Fidelity Greater China Fund and the Pinebridge Greater China Equity Fund.
There was a major recovery in Greater China equities markets during the first four months of this year, which reversed the sharp declines suffered in 2018.
The MSCI Golden Dragon index of China, Hong Kong and Taiwan stocks rose 18.12% between 1 January and 30 April, after plunging 14.56% last year, according to FE Analytics data.
The US Federal Reserve’s dovish interest rate stance, stimulus measures by China’s authorities to promote flagging economic growth, and widespread optimism that the US and China might resolve their trade dispute combined to improve investor sentiment.
However, the outlook suddenly looked bleaker in May. Rather than tend toward resolution, the US and China seem set on a more confrontational path.
Demonstrating the precarious state of investor sentiment, the MSCI Golden Dragon Index has fallen 9.09% since the beginning of the month, according to FE Analytics data.
Clearly, fund managers will need to become accustomed to further bouts of market volatility.
FSA asked Luke Ng, senior vice president of research at FE Analytics, to compare two well-established Greater China equity products – the Fidelity Greater China Fund and the Pinebridge Greater China Equity Fund – and assess their abilities to cope with a likely turbulent year.