Head To Head

HEAD-TO-HEAD: HSBC versus JP Morgan

FSA compares two Asia corporate bond funds: the HSBC Asian Bond Fund and the JP Morgan Asian Total Return Bond Fund.

by Francis Nikolai Acosta 25 October 201910 November 2020

Introduction

Fixed income funds have become the clear winners of 2019, with global net inflows of $586.8bn this year ending September, according to Morningstar Direct.

On the flipside, equity funds had net outflows of $175.9bn.

“We’ve really seen an influx of investor appetite also in Asia when it comes to fixed income fund,” Patrick Ge, Hong Kong-based analyst for manager research at Morningstar, told FSA.

“The Fed’s shift in monetary policy and having a more dovish sentiment, as well as the growing concerns over global economic slowdown and recessionary fears, have created this risk-off backdrop,” he added.

The scenario is true in Hong Kong, where nearly 70% of gross funds sales this year came from fixed income products, Ge said, citing data from the Hong Kong Investment Funds Association (HKIFA).

“It is a completely different story from last year, especially for Asia bond funds, which were sold off last year,” he said.

As of the end of August, Asia bond funds had net inflows of $6bn in Hong Kong, which compares to $2.9bn last year, HKIFA data shows.

Against this backdrop, FSA asked Ge to compare two Asia bond funds: the HSBC Asian Bond Fund and the JP Morgan Total Return Fund, which are both Hong Kong-domiciled products.

	HSBC	JP Morgan
Size	$2.1bn	$3.31bn
Inception	June 2011	January 2005
Manager	Steven Wong, Alfred Mui	Shaw Yann Ho, Jason Pang
Three-year cumulative return*	10.52%	10.00%
Three-year annualised return**	3.34%	3.16%
Three-year annualised alpha**	0.93	1.01
Three-year annualised volatility**	2.57	2.01
Yield	3.73%	4.78%
Morningstar analyst rating	****	***
Morningstar star rating	Neutral	Neutral
FE Crown fund rating	****	*****
OCF	1.10%	1.07%

Source: FE Analytics, Morningstar Direct

*21 October 2016 – 23 October 2019

**22 October 2016 – 18 October 2019

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