HEAD-TO-HEAD: Hamon vs Schroders

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Investment process

The Hamon and Schroders funds invest predominantly in Asia ex-Japan equities and have concentrated portfolios, with both having at least 50 names in their portfolios.

However, these two products employ different investment processes, according to Ng. While each of them has a growth tilt, the Hamon fund is more focused on the growth aspects of companies, while the Schroders fund is skewed towards quality names.

“The Hamon fund employs a growth-at-a-reasonable-price (GARP) approach in investing,” he said, adding that the process is a bit “generic”.

Turning to the Schroders fund, Ng said the product likes companies that have higher returns on invested capital relative to the weighted average cost of their capital.

This product may also invest in those firms that have lower returns on investment capital, given their situation is improving.

“Because of that, although the portfolio has a growth tilt, it may hold some value stocks,” Ng added.

Another difference he highlighted between the funds is their benchmark indices. The Hamon fund’s benchmark index is the MSCI Daily TR AC Far East ex-Japan Index, while the Schroders fund uses the MSCI AC Asia (ex-Japan) index.

The main difference is that the Far East ex-Japan Index excludes India. However, the Hamon fund has an off-benchmark allocation to India, at 15%, which is even larger than MSCI AC Asia (ex-Japan) Index’s 10% allocation to the country.

Sector allocations (%)

Source: Morningstar Direct

Top 5 country/region allocations (%)

Source: Fund factsheets

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