HEAD-TO-HEAD: JP Morgan vs Matthews Asia

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Luke Ng, FE Advisory Asia

Year-to-date, equities in Asia-Pacific including Japan have been hit harder than the broader equity market. The MSCI AC Asia Pacific Index has returned -3.81% to 20 July, while the MSCI AC World Index returned 1.81%, according to data from FE Analytics.

Asia-Pacific equity markets have been impacted this year by US-China trade tensions and tariffs and a strengthening US dollar.

However, Raymond Chan, chief investment officer for Asia-Pacific at Allianz Global Investors, is looking past the current headlines and remains positive because he believes the asset class is backed by positive earnings momentum and cheaper valuations, compared with the broader markets.

Blackrock’s head of Asian and global emerging market equities Andrew Swan is also positive on the asset class, citing the same reasons.

“Corporate profitability was very strong last year, partly because of a weaker US dollar,” Swan said. “This year, the growth of corporate earnings will moderate from the average of 20% in 2017. Despite a stronger dollar, we are still looking at double-digit earnings growth in the region.”

Against this backdrop, FSA asked Luke Ng, senior vice president at FE Advisory Asia, to provide a comparative analysis of two Asia-Pacific including Japan equity products: the JP Morgan Pacific Securities Fund and the Matthews Asia Asia Dividends Fund.

 

	JP Morgan Pacific Securities Fund	Matthews Asia Asia Dividend
Size	$680.4m	$536m
Inception	26 May 1978	26 August 2006
Manager	Aisa Ogoshi/Robert Lloyd	Yu Zhang, Robert Horrocks, Vivek Tanneeru, Sherwood Zhang
Morningstar Rating	****	****
FE Crown Fund Rating	*****	*****
Fees (OCF)	1.67%	1.74%

Source: FE and Morningstar