Posted inHead To Head

HEAD-TO-HEAD: JP Morgan versus Neuberger Berman

FSA compares two US value equity products: the JP Morgan US Value Fund and the Neuberger Berman US Multi Cap Opportunities Fund
by Rupert Walker

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Fees

 

The ongoing charges fee (OCF) for the Hong Kong retail share class of the JP Morgan fund is 1.71%, which is lower than the 1.80% median for its North America equity fund peer group.

In contrast, the Neuberger Berman’s fund’s annual expenses of 3.01% are at top of the OCF range for SFC-authorised funds in the North America equity category.

“The clean share class for both funds are reasonable,” said Poole, “but the charges for Hong Kong retail share classes are typically higher than in the UK and Europe”.

“That is clearly the case with the Neuberger Berman product.”

Fees matter, not just on a relative basis, but because they affect fund performance, according to Morningstar.

The firm published a paper in 2016 that found that the expense ratio is the most proven predictor of future returns for any fund.  Earlier this year, it started using a new evaluation framework that places a greater emphasis on fees and benchmark-relative performance than previously.

“However, there seems little regulatory pressure to reduce fund fees in Hong Kong, or elsewhere in Asia,” said Poole.

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