HEAD-TO-HEAD: Invesco versus Schroders

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The Invesco and the Schroders funds versus their benchmark index, according to FE data.

Performance

Given that both funds have a quality focus, investors should expect both to be more downside resilient and less volatile compared to funds in the Greater China peer group, according to Share.

For the Invesco fund, Share believes that stock-picking ability is the performance driver.

Holdings in the portfolio are diverse, and so are the fund’s sources of alpha: main performance contributors have been consumer, healthcare, energy and basic material companies, she said.

Turning to the Schroders fund, Share said that performance has been supported by allocations to the large cap Chinese companies, especially those in the technology sector.

“It was mainly the tech and big growth stocks that outperformed last year,” she said.

Discreet annual calendar performance

Source: FE Analytics

However, she added that the fund started to trim its position in the tech sector toward the end of 2017.

“Tencent has underperformed a bit this year. But the Schroders fund trimmed the big tech names and took profit late last year, and that has worked very well for the fund.”

In terms of volatility, the Invesco fund’s year-to-date volatility ending 20 September is 18.22, according to FE data. The Schroders fund volatility is 20.92, which is close to the index (20.92).

Share explained that if the index has a volatile constituent, the Schroders fund will most likely have that volatility as well.

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