HEAD-TO-HEAD: Invesco versus Schroders

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Performance

The Schroder fund has earned a higher three-year cumulative return than the Invesco fund and has outperformed its rival in each calendar year since at least 2014, whether in bull or bear market conditions, according to FE Analytics data.

The three-year cumulative returns for Schroders and Invesco are 60.62% and 41.87% respectively, exceeding the average performance of other Greater China equities products available to Hong Kong and Singapore retail investors.

However, only the Schroders fund beats the MSCI Golden Dragon Index, which is the benchmark for both funds.

“The greater growth focus of the Schroder fund accounts for its strong performance, while its retention of defensive financial stocks during last year’s turbulent market conditions gave it some protection,” said Share.

Meanwhile, Invesco’s “quality tilt” provided a buffer for the fund, despite having little or no exposure to financials. Possibly, its outsized bet to the consumer discretionary sector – driven by domestic demand – was providential as concerns about a protracted China-US trade war dampened investor sentiment towards export-oriented Chinese companies.

“Both funds coped well during the 2018 downturn,” said Share.

The annualised volatility of the Schroder fund (17.47%) is higher than the Invesco fund’s (15.61%) volatility, according to FE Analytics.

Nevertheless, Share thinks that the Invesco fund is “generally lumpier and more likely to fluctuate, because of its tendency to deviate from the benchmark and take bigger high-conviction bets”.

Discrete annual performance

 Source: FE Analytics

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