Head To Head, News

HEAD-TO-HEAD: JP Morgan AM versus UBS AM

FSA compares two highly-rated China equity funds: the JP Morgan China Fund and the UBS China Opportunity Fund.

by Francis Nikolai Acosta 17 April 202010 November 2020

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Source: FE Fundinfo. In US dollars. Three-year cumulative return.

Performance

Both the JP Morgan and UBS funds have consistently outperformed their benchmark index and peers, according to Liang.

However, she noted that the funds’ strong performance in the past year is partly due to their focus on growth stocks.

“Both funds will do well when growth stocks are in favour,” she said.

On the flipside, Liang said that the funds may underperform when value stocks rally.

However, she noted that the UBS fund may provide more downside protection in value rallies as it is more flexible in terms of managing its cash position.

“In 2018, value stocks performed better than growth stocks, but the UBS fund was still able to outperform the index due to its large cash position,” she said.

Discreet annual performance (%)

Fund / index / sector	YTD 2020	2019	2018	2017	2016	2015	2014
JPM China	-1.71	41.29	-23.13	59.11	-4.64	-7.71	6.12
UBS (Lux) Equity China Opportunity	-2.92	41.56	-14.66	59.37	-2.3	15.95	1.86
Index : MSCI China 10/40 GTR in US	-8.48	22.41	-18.11	49.62	0.65	-7.81	8.69
Sector : HKM Equity China TR in US	-6.96	27.57	-22.2	37.83	-8.52	-4.85	17.26

Source: FE Fundinfo. In US dollars.

In terms of volatility, Liang expects the UBS fund to be less volatile compared to the index, given that it makes use of cash to limit downside risk, while the JP Morgan fund’s volatility would resemble that of the index given that it is more benchmark-aware.

Three-year annualised volatility

Fund / Index	Volatility
JPM China	22.98
UBS (Lux) Equity China Opportunity	21.02
Index : MSCI China 10/40 GTR in US	21.19
Sector : HKM Equity China TR in US	19.07

Source: FE Fundinfo.

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