HEAD-TO-HEAD: First State vs Morgan Stanley

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Conclusion

Despite the strong growth of the asset class during the past decade there are very few infrastructure funds available to Hong Kong and/or Singapore retail investors, which is perhaps a missed opportunity for asset management firms, according to McDermott.

“We are strong supporters of the First State fund, as we believe they are pioneers in this market, and we much prefer a higher active share component – that is, one that diverges from its benchmark index –when it comes to actively-managed funds,” he said.

FE Fundinfo has awarded the First State fund its top rating of five crowns, and Morningstar has given it a bronze analyst rating as well as four stars.

The Morgan Stanley fund is less highly rated by both research firms, receiving just two crowns from FE Fundinfo and three stars from Morningstar.

FE Fundinfo’s crown-rating methodology assesses a fund’s alpha, volatility and consistency of performance, while Morningstar’s ratings are based on historically-adjusted performance and the analyst rating is based on forward-looking analysis.

“The First State team are conservative investors, identifying that capital preservation is critical to achieving long-term capital growth. This is a key element in the construction of its 40-50 stock portfolio,” he added.

“The managers are recognised leaders in the listed infrastructure investment area, and we prefer their fund over the Morgan Stanley fund, although it too has periods or strong performance.”

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