HEAD-TO-HEAD: Jupiter vs Matthews Asia

123456

Source: FE Analytics, in US dollar terms

Performance

The above chart shows trailing five-year performance of the two funds. FE data shows that the Matthews Asia fund also outperformed the Jupiter product, the benchmark and the category on a one- and three-year basis.

As mentioned earlier, the Matthews Asia income strategy is not purely driven by dividend payouts. The managers put an emphasis on the ability to pay dividends in the future, which reflects the financial strength of a company and supports the outperformance under a changing market environment, according to Ng.

“Comparatively, the Matthews Asia fund shows a balanced and stable return through different cycles since its inception. It also has stronger downside protection,” Ng said.

However, last year both funds failed to beat the benchmark and they both slightly underpeformed the category average.

Ng believes this is not unusual because it happens in many actively-managed portfolios. In 2017, the market was driven by momentum of a small number of mega-cap names.

He explained that the general rule of funds to not invest more than 10% in an individual stock and not more than 40% in a single region or industry (the 10/40 cap) is the reason for the underperformance of many active managers in 2017.

This year, the Greater China stock markets became more volatile. The small/mid cap selection in the Matthews Asia fund has contributed to the fund’s comparative outperformance year-to-date, according to Ng.

While the Jupiter fund emphasizes longer-term trends, its short-term performance may be impacted by increasing market volatility.

Performance by calendar year (%)

Source: FE Analytics, in US dollar terms

* Year-to-date to 14 September

** Category average comprises of SFC-registered China equity funds

123456