Time makes fools of us all and so determining which funds will perform best over a forthcoming 12-month period is no easy feat.
However, that is exactly what the FSA awards aim to do as each year we shortlist a number of funds using FE fundinfo data and then an independent panel of professionals from Asia’s fund selector community choose the winners based on the funds they think will outperform in the next 12 months from June 2022 to June 2023.
So how did our list of judges fare in 2023 for the Hong Kong awards? On the whole, the results were not too shabby. Most (19 out of 28) funds selected by the judges outperformed their peers. The Platinum and Gold awarded funds in Asia Pacific Equity, Global Emerging Markets Equity, Japanese Equity and High Yield all outperformed their peers.
|FSA Award||Asset Class||Fund||Return (%)||Sector return (%)||Result|
|Platinum||Asia Pacific Equity||Nikko AM Asian Small Mid Equity||8.1||-0.44||Outperform|
|Gold||Asia Pacific Equity||Matthews Asia Small Companies||6.61||-0.44||Outperform|
|Platinum||Emerging Market Bond||AB Emerging Market Corporate Debt Portfolio||5.14||6.67||Underperform|
|Gold||Emerging Market Bond||HSBC GIF India Fixed Income||1.27||6.67||Underperform|
|Platinum||European Equity||BlackRock GF European||23.97||20.34||Outperform|
|Gold||European Equity||Schroder ISF European Sustainable Equity||13.28||20.34||Underperform|
|Platinum||Global Bond||JPMorgan Global Bond||-0.71||0.41||Underperform|
|Gold||Global Bond||Invesco Tactical Bond (UK)||1.46||-0.62||Outperform|
|Platinum||Global Emerging Market Equity||JPM Emerging Middle East Equity||4.01||3.86||Outperform|
|Gold||Global Emerging Market Equity||BNY Mellon Global Emerging Markets Opportunities||4.85||3.86||Outperform|
|Platinum||Global Equity||JPM Global Healthcare||4.23||13.87||Underperform|
|Gold||Global Equity||JPM Global Dividend||16.13||13.87||Outperform|
|Platinum||Greater China/China Equity||HSBC China Dragon||-10.73||-19.83||Outperform|
|Gold||Greater China/China Equity||Fullgoal China Small-Mid Cap Growth||-21.3||-17.65||Underperform|
|Platinum||High Yield||Allspring (Lux) Worldwide U.S. Short-Term High Yield Bond||7.07||6.2||Outperform|
|Gold||High Yield||JPM US High Yield Plus Bond||6.79||6.2||Outperform|
|Platinum||Japanese Equity||BOCIP Japan Small & Mid Cap Opportunity||14.43||8.82||Outperform|
|Gold||Japanese Equity||Fidelity Japan Value||23.99||16.94||Outperform|
|Platinum||Mixed Asset||HSBC Jintrust Dynamic Strategy Mixed Securities Investment||-17.05||-8.96||Underperform|
|Gold||Mixed Asset||Janus Henderson Balanced||8.25||4||Outperform|
|Platinum||Regional Bond||Schroder China Fixed Income||5||-6.16||Outperform|
|Gold||Regional Bond||AB SICAV I Global Dynamic Bond Portfolio||2.92||2.28||Outperform|
|Platinum||Regional/Single Country Emerging Market Equity||Schroder ISF Emerging Asia||-6.12||-2.53||Underperform|
|Gold||Regional/Single Country Emerging Market Equity||Barings Latin America||29.23||29.4||Underperform|
|Platinum||Sector Equity||Threadneedle (Lux) Global Technology||25.08||12.23||Outperform|
|Gold||Sector Equity||AB International Health Care Portfolio||6.46||-3.47||Outperform|
|Platinum||US Equity||JPM US Growth||25.84||17.41||Outperform|
|Gold||US Equity||BlackRock GF US Flexible Equity||17.94||17.41||Outperform|
The Threadneedle (Lux) Global Technology fund, which was awarded a Platinum for the Sector Equity asset class by the judges, was one of the best relative outperformers in the list above.
Managed by Columbia Threadneedle’s Paul Wick, the fund is heavily invested in US technology stocks, which rallied during the opening half of 2023 on the back of falling inflation and rising expectations surrounding the potential of artificial intelligence (AI) to boost earnings for technology companies.
Relative to its benchmark, the MSCI World Information Technology sector, the fund also benefited from a large overweight to semiconductor stocks, which was also boosted by the demand for AI chips during the opening half of 2023.
Japanese funds awarded also performed relatively strongly. The Fidelity Japan Value fund was one of the highest performing funds in the list, beating its peer group by 7%. The BOCIP Japan Small & Mid Cap Opportunity fund also enjoyed a strong performance, with small and mid-cap stocks also trading higher amid increased inflows towards Japan.
Both Asia Pacific Equity awarded funds were small cap-focused strategies and both outperformed the wider peer group average during a turbulent year for the region. The sector average was down 0.44% over the period, whereas the Platinum pick Nikko AM Asian Small Mid Equity was up 8.1% and Matthews Asia Small Companies was up 6.6%.
One reason for their outperformance may be down to the fact that smaller companies in Asia can often be more insulated from macroeconomic uncertainties that have weighed down larger Chinese stocks that dominate the emerging market index.
When it comes to the China Equity asset class specifically, in absolute terms the HSBC China Dragon and Fullgoal China Small-Mid Cap Growth fund were both down 10.7% and 21.3% respectively.
However, on a relative basis, the HSBC China Dragon fund performed better than its peer group, which was down 19.8% over the 12-month period.