HEAD-TO-HEAD: Invesco vs JP Morgan

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The three-year performance of the Invesco and JP Morgan funds versus their benchmark, the MSCI Golden Dragon Index. Source: FE Analytics. Fund and index NAVs have been converted to US dollars.

Performance

The two products have performed differently throughout the years, as they behave differently depending on the market environment, according to Ng.

During rallies, for example, Ng said he expects the JP Morgan fund to perform better than the Invesco fund.

“The JP Morgan fund performs better when the market sentiment is positive and when economic growth is going up, especially during the Goldilocks environment we saw in 2017,” he added. 

Discreet annual performance

Source: FE Analytics

However, he said he expects the JP Morgan fund to underperform the Invesco fund when the market is volatile.

“The Invesco fund has a tendency to have better downside protection. One key reason is its focus on the private sector,” Ng said.

The Invesco fund’s concerns about valuations have also helped the product to perform better than the index in 2018.

“What helped the performance of the fund was when it started to wind down its Chinese exposure at the start of 2018 when valuations were becoming more expensive,” he said.

In terms of valuation, the Invesco fund is less volatile relative to its index and the JP Morgan fund, according to Ng. He added that it has one of the lowest valuations in the Greater China category.

Three-year annualised volatility

Source: FE Analytics

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