FSA believes singling out the top performers based on independent, data-driven criteria can provide a fund house with a valuable distinction among its peers. However, the process has to be clear, transparent and objective. FSA uses historical and forward-looking screens — both quantitative and qualitative methods of selecting the winners.
How it’s done
FSA’s awards are based on data from FE Fundinfo, which filters the universe of funds in Hong Kong (1344 eligible funds) and Singapore (2849 eligible funds) for alpha, volatility and consistency across 14 categories. FE then creates two shortlists – one for Hong Kong and a separate one for Singapore.
(In Hong Kong, funds have to be registered for retail sale to be eligible. In Singapore, funds with “Accredited Investor” status are eligible).
The methodology for the shortlists is 100% quantitative, providing an apples-to-apples comparison, according to Luke Ng, senior VP of research at FE Fundinfo in Hong Kong.
Fund selector judges
Next, the shortlists are given to independent panels of well-known professionals from Asia’s fund selector community. Hong Kong and Singapore have separate judging panels to reflect the difference in offerings.
One question was provided to guide them, and it was forward-looking:
Given this list, which fund within each asset class do you think will perform best over the next 12 months?
The judges’ selections will determine the winners (Platinum and Gold). Winners will be revealed in early January.
Asia fund trends
Commenting on the shortlists, Ng said that in Hong Kong, the scoring was very close among the top performers in the mixed asset category.
In Singapore, it was Asia-Pacific equity funds.
“The funds in these asset classes that have made it onto the shortlists have had exceptionally tough competition among peer funds,” Ng said.
Also, in Singapore, in the Japan equity asset class, he noted that all funds except one are new this year. “It seems growth funds in Japan have less of an advantage than they did last year and quality investing has been performing better.”
Across all asset classes, only 35% of funds in Singapore were also on last year’s shortlist but in Hong Kong about half of the funds returned from last year.
“Singapore has more funds in the universe and therefore has more competition than in Hong Kong, where the top performers tend to continue to do well,” Ng explained.
Later this week, FSA will begin publishing the shortlists, one for Hong Kong and one for Singapore, and winners will be revealed in early January.