Posted inHead To Head, News

HEAD-TO-HEAD: Franklin Templeton versus JP Morgan

FSA compares two flexible Asian fixed income products: The Templeton Asian Bond Fund and the JP Morgan Asian Total Return Bond Fund.
by Francis Nikolai Acosta

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Conclusion

FE Analytics has given the FTI fund a four-star crown rating, while the JP Morgan fund receives five crowns.

The crown-rating methodology assesses the fund’s alpha, volatility and consistency of performance.

Ng does not prefer one fund over the other, noting that both products have been consistent with their investment strategies.

However, Ng said that both products have different uses in a portfolio, given the differences in their strategies.

He believes that investors who are seeking to capture the whole Asia fixed income universe should consider investing in the JP Morgan fund.

“If you are talking about a core Asia product, the JP Morgan fund includes most of the asset classes in the portfolio, including China, which compares to the FTI product that only focuses on certain countries,” he said.

Turning to the FTI product, Ng believes that the fund is suitable for investors who are seeking more diversification in their portfolios.

The Templeton fund is unique relative to other Asia fixed income funds in the market, given its low duration and country allocation, he said.

“Interestingly, the Templeton fund has resulted in very low correlation to most of the asset classes, including global equities, emerging market equities and even Asia fixed income funds. So this is the added-value from a portfolio construction perspective.”

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