Head To Head

HEAD-TO-HEAD: First State versus JP Morgan AM

FSA compares two Asia mixed-asset products: The First State Asian Bridge Fund and the JPM Asia Pacific Income Fund.

by Francis Nikolai Acosta 3 July 20208 August 2022

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PERFORMANCE

Given that the First State fund generally has a higher allocation toward fixed income, Ge expects the fund to outperform the JP Morgan product during periods of volatility. He added that the quality bias of the First State fund’s equity sleeve makes it more defensive during bear markets.

For example, the First State offering has outperformed the JP Morgan fund this year, he said.

Discreet annual calendar performance

Fund / index / sector	YTD 2020	2019	2018	2017	2016	2015	2014
First State Asian Bridge I TR in US	-2.36	15.58	-4.03	19.86	2.33	-1.37	9.09
JPM Asia Pacific Income A Acc NAV USD in US	-8.44	11.35	-6.05	14.18	6.14	-3.05	7.11
Sector : HKM Mixed Asset Asia Pacific TR in US	3.68	18.57	-14.87	20.64	-0.5	-6.24	2.61

Source: FE Fundinfo. In US dollars.

Turning to the JP Morgan fund, Ge expects the fund to lag peers during environments where growth outperforms value given its value tilt. For example, the fund underperformed in 2017, a period where the market was driven by growth sectors, such as internet stocks.

In terms of volatility, Ge expects the First State fund to be less volatile than the JP Morgan offering because of its fixed 50:50 allocation to equities and bonds.

Three year annualized volatility

Fund / sector	Volatility
First State Asian Bridge I TR in US	9.16
JPM Asia Pacific Income A Acc NAV USD in US	11.15
Sector : HKM Mixed Asset Asia Pacific TR in US	12.52

Source: FE Fundinfo.

“Given that the bond sleeve helps lower return volatility, it’s no surprise to see the First State fund to post lower volatility relative to the JP Morgan fund,” Ge said.

“Equity sleeves typically supply most of the active risk and volatility in the asset allocation portfolio,” he added.

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