About 30% of all funds that are 20 years or older have delivered a minimum of 10% annualised returns over the last decade, according to FE data for funds available for sale in Hong Kong and Singapore.
That compares to 18% of funds at least ten years old.
Additionally, the five best performing oldest funds beat the key indexes over 10 years.
The top five oldest funds outperformed the S&P 500 over 10 years to 21 March 2019. The five funds also beat all the key indices, among them the MSCI World, the MSCI Emerging Markets and the Hang Seng, which had returns less than the S&P 500 over the ten-year period.
The chart below illustrates the point. Using funds available for sale in Hong Kong and Singapore (5262 funds), the filter was applied for funds launched in Asia before 1 January 1999, resulting in 899 products.
A further screen for a minimum 10% annualised return over 10 years resulted in 280 products.
Ranking the 280 products by performance, the top five funds show strong outperformance versus the S&P 500.
| Launch date (in Asia) | 10-year Annualised return % | 10-year Cumulative return % | FE Crown rating (out of 5) | |
| JP Morgan Thailand | June 1994 | 21.85 | 626.5 | 3 |
| Morgan Stanley US Growth | August 1992 | 20.96 | 570.4 | 4 |
| JP Morgan US Technology | December 1997 | 20.25 | 532.2 | 4 |
| First State Indian Subcontinent | November 1999 | 19.68 | 502.7 | 5 |
| JP Morgan Philippines | June 1994 | 19.57 | 502.5 | 5 |
| S&P 500 | — | 15.47 | 358.2 | — |
Source: FE. In US dollars. Annualised returns to end of February 2019, cumulative to 21 March 2019.
The aged funds survived through both the tech bubble and the Lehman-sparked global financial crisis.
Of course it is not only the fund but the management team that is critical.
Over twenty years, four of the five funds changed their management teams. But judging by the long-term performance, they likely had effective continuity processes.
The exception is the Morgan Stanley fund, which has had the same six-person investment team since 2000. Lead manager Dennis Lynch has been at the helm since 1997.
Returns over two decades
Extending the performance period to 20 years, the funds retained clear outperformance, both annualised and cumulative, over the S&P 500, with the exception of the JP Morgan US Technology Fund.
Likely it was hit hard during the tech bubble around 2000, resulting in a 20-year cumulative return of -30%. It is interesting that the firm changed the fund’s management as the financial crisis hit: Greg Tuorto took over in 2009.
20 year performance vs the S&P 500
