The FSA Spy market buzz – 6 September 2024
Machine learning Chinese investment, BlackRock’s AI patience, Time Magazine’s AI cover, happier staff equal better returns, do wealth managers add value? sexy legs and much more.
The Schroders fund has outperformed the MSCI AC Asia ex Japan Index and industry peers on a three-year basis. On the flipside, the Ninety One offering has underperformed both the index and peer average, according to data from FE Fundinfo.
While the Ninety One offering underperformed during the period, Poole noted that there were periods that it performed well.
“The Ninety One Fund struggled in years when the main driver of returns has been broad macro-economic themes, such as in 2015, when China was struggling, and also in 2020. It wasn’t stock-picking in the market that was driving returns in those years, it was broad market beta,” he said.
“These are not breaking years for the stock-picking 4Factor model. But in a more normal environment in Asia, where there are more alpha opportunities, the 4Factor model has had a history of identifying potential alpha.”
Discreet annual calendar performance (%)
Fund / index / sector | YTD 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
Ninety One Asian Equity | 9.85 | 15.6 | 19.89 | -18.13 | 48.79 | 3.04 | -10.64 |
Schroder ISF Asian Opportunities | 6 | 26.27 | 22.79 | -15.75 | 50.82 | 5.56 | -4.39 |
Index : MSCI AC Asia ex Japan | 7.73 | 25.36 | 18.52 | -14.12 | 42.08 | 5.76 | -8.9 |
Sector : HKM Equity Asia Pacific ex Japdan | 6.98 | 21.83 | 18.21 | -16.05 | 35.01 | 2.3 | -8.49 |
Meanwhile, the Schroders fund was expected to do well especially last year, given its outright focus on growth and quality.
“Quality names have done well last year, and growth and tech stocks also benefited the fund’s returns. So you are going to see that outperformance from Schroders clearly last year,” Poole said.
He added that the quality bias of the fund has helped it deliver more consistent returns, even during volatile periods.
In terms of volatility, Poole believes that both strategies have similar volatility profiles.
“Asian equities in general tend to have a much higher volatility than developed and global equities.”
Three-year annualised volatility
Fund / index / sector | Volatility |
Ninety One Asian Equity | 19.98 |
Schroder ISF Asian Opportunities | 20.25 |
Index : MSCI AC Asia ex Japan | 19.36 |
Sector : HKM Equity Asia Pacific ex Japan | 18.38 |
Machine learning Chinese investment, BlackRock’s AI patience, Time Magazine’s AI cover, happier staff equal better returns, do wealth managers add value? sexy legs and much more.
Part of the Mark Allen Group.