The FSA Spy market buzz – 1 November 2024
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HEAD-TO-HEAD: HSBC Jintrust vs Invesco Great Wall
FSA compares two MRF-approved China mixed-assets funds: the HSBC Jintrust Dynamic Strategy Fund and the Invesco Great Wall Core Competence Mixed Securities Fund.
Pictured: Yiming Li, analyst, manager research, Morningstar
Since the launch of the Mutual Recognition of Funds in 2015, nine funds have been approved for sale on the mainland (“northbound”) and 24 funds for sale in Hong Kong (“southbound”).
The northbound funds, which are domiciled in Hong Kong, have attracted much higher interest than the southbound ones. The total net northbound flows from January 2016 to September 2017 were forty times higher than those into the southbound funds.
While most southbound MRF funds are managed by joint ventures of mainland and foreign fund management firms, they give foreign investors an opportunity to tap the skills of local fund managers in China, who are more attuned to the idiosyncrasies of the country’s policy-driven stock market.
China’s onshore market indeed has some unique characteristics. As Morningstar analyst Yiming Li points out, few onshore managers follow benchmarks, fees have little importance and mutual funds in China invest in a way similar to hedge funds in the US.
Using the MRF as the context, FSA compares two funds in the scheme, the HSBC Jintrust Dynamic Strategy Fund and the Invesco Great Wall (IGW) Core Competence Mixed Securities Fund. Both were approved for southbound distribution on 30 December 2015. Yiming Li provides the analysis.
| HSBC Jintrust Dynamic Strategy Fund | Invesco Great Wall Core Competence Mixed Securities Fund | |
| Size | $141.1m | $240.1m |
| Size of MRF share class | $0.1m (0.1%) | $9.6m (4%) |
| Inception | 9 April 2007 | 20 December 2011 |
| Manager | Min Guo (since 2015) | Guang Yu (since inception) |
| Morningstar Rating | ***** | **** |
| Fees (OCF) | 1.80% | 1.77% |
Data: Morningstar
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