HEAD-TO-HEAD: FSSA versus Schroders

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Source: FE Fundinfo. Three-year cumulative returns in US dollars.

Performance

The FSSA strategy has typically shown strong downside because of its stress on absolute returns and management quality. However, it suffered more than its index during the coronavirus-driven market sell-off in 2020, because of the portfolio’s exposure to exporters such as Techtronic Industries and Shenzhou International. This year, stock selection in the consumer discretionary and communication services sectors has added value.

The fund has delivered a 28.49% three-year cumulative return in US dollar, according to FE Fundinfo, outperforming the MSCI Hong Kong index (14.25%) and the average return of peers available to Hong Kong retail investors (8.05%). Its annualised volatility of 18.94% over the same period is similar to the volatility of the index (18.84%).

“The strategy has generated a strong performance over 20 years, and has shown a good recovery this year after suffering in 2020,” noted Poole.

The Schroders fund has also delivered strong returns during Toby Hudson’s long period at the helm.

Over three years, its cumulative return is 22.32% in US dollars, according to FE Fundinfo, and has experienced annualised volatility of 19.92%.

“The strategy is more volatile and has suffered greater drawdowns,” said Poole.

In the past year, consumer discretionary stock picks have not been helpful, in particular, exposure to Alibaba and New Oriental Education & Technology, which were both victims of Beijing’s regulatory crackdown.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 10 Dec 2021; ** benchmark of FSSA fund only.

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