The FSA Spy market buzz – 22 November 2024
Dimensional excludes the Middle Kingdom; JP Morgan’s optimistic outlook; Household wealth is rocketing; Schroders is thinking about privates; Ninety One’s pithy AI; German woes and much more.
HEAD-TO-HEAD: Franklin Sealand versus Invesco Great Wall
FSA compares two onshore mixed-asset products: The FTS China Prospect Mixed Assets Fund and the Invesco Great Wall Core Competence Mixed Securities Fund.
The FTS fund versus the IGW fund. Note: Their benchmarks are not available on FE Fundinfo.
PERFORMANCE
Li believes that the FTS fund will outperform the IGW product when the market is in favour of higher growth or emerging companies.
“Given its larger position in emerging growth sectors, the FTS fund is expected to perform better,” Li said. For example, this year, the FTS fund has performed nearly 50%, which compares with the mid-20s return of the IGW fund, he added.
On the other hand, Li expects the IGW fund to outperform when the market is driven by the more stable sectors, such as in 2017.
Discreet calendar year performance
| Fund / index / sector | YTD 2020 | 2019 | 2018 | 2017 |
| Franklin Sealand China Prospect Mixed Assets H in US | 48.17 | 36.85 | -21.9 | 25.18 |
| Invesco Great Wall Core Competence Mixed Securities H in US | 23.11 | 30.76 | -30.32 | 56.37 |
Source: FE Fundinfo. In US dollars.
In terms of volatility, Li believes that the IGW fund should be less volatile than the FTS fund.
“IGW has a higher allocation in the stable growth sectors than the FTS product, which reduces the volatility of its performance,” he said.
The five-year standard deviation of the FTS fund is 23, which is slightly higher than the IGW fund (22), Li added.
However, when it comes to their three-year annualised volatility, the FTS fund is less volatile than the IGW offering, FE Fundinfo data shows.
Three-year annualized volatility
| Fund / Index | Volatility |
| Franklin Sealand China Prospect Mixed Assets H in US | 22.52 |
| Invesco Great Wall Core Competence Mixed Securities H in US | 25.05 |
Source: FE Fundinfo.
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