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Goldsmith said that the significant differences in the strategies of the two funds means that a choice between the two comes down to investor preference.
Morningstar has given both funds a bronze analyst rating. The rating represents the research firm’s analysts’ conviction in the fund’s ability to outperform its peer group or a relevant benchmark index on a risk-adjusted basis over at least five years.
For investors with an appetite for risk, the JP Morgan product could be a consideration. As noted earlier, it takes the larger equity risk of the two products and has the bigger exposure to emerging markets.
Goldsmith added that investors should look at the underlying assets in the portfolio of the JP Morgan fund as there is a potential concentration risk and turnover of positions happens far more frequently than in the SLI fund.
The SLI fund, by comparison, has always been run with risk control predominant. The approach of the SLI fund aims to prevent over-concentration in one particular idea or position.
It can be a consideration for more cautious investors and those who are sensitive to significant fluctuations in returns.
“It is not that the SLI fund cannot lose money,” Goldsmith said. “It is about the investment process and fund management, which has been proven to generate returns and income in a less volatile way compared to the JP Morgan fund.”