Head To Head

HEAD-TO-HEAD: JP Morgan AM vs Schroders

FSA compares the JP Morgan Japan Equity Fund and the Schroder ISF Japanese Opportunities Fund.

by Francis Nikolai Acosta 10 August 201810 November 2020

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The JP Morgan Equity Fund and the Schroder ISF Japanese Opportunities Fund vs their benchmark index, according to FE Analytics.

Performance

One of the major drivers for both funds’ performance is their style component.

For example, the JP Morgan fund has benefited when growth stocks in Japan outperformed value stocks in 2015 and 2017-2018, according to Yew.

Discreet annual calendar performance

Fund / benchmark	2018	2017	2016	2015
JP Morgan Japan Equity	4.68	36.65	-3.36	18.47
Schroder ISF Japanese Opportunities	-6.12	31.9	4.57	13.13
TSE Topix	-1.63	26.55	3.46	11.69

Source: FE Analytics

The fund, however, underperformed its index in 2016 when the market was primarily driven by value stocks.

The opposite could be said for the Schroders fund, which benefited from the outperformance of value stocks in 2016, according to Yew.

As mentioned earlier, another driver for the performance is the relatively big allocation to small-cap companies.

However, Yew noted that the Schroders fund manager has been struggling to invest in some of the more illiquid small cap names recently because of the size of the fund, which has reached $1.92bn.

“When AUM grows, this inhibits the managers’ ability to implement the strategy on a more consistent basis,” he explained.

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