Morgan Stanley, PineBridge and Invesco funds are among the top performing international equity strategies year-to-date, according to data compiled by FSA.
As markets move past the third quarter of 2023, many global equity funds have bounced back after a turbulent year in 2022.
Equities have rallied in anticipation of inflation starting to moderate and central banks indicating that interest rates may be approaching a peaking point.
In dollar terms, the MSCI World index has rallied 14.73% so far in 2023, after a 19.46% drop in 2022.
Against this backdrop and with one quarter to go in 2023, FSA has compiled a list of the top performing strategies in the Hong Kong and Singaporean mutual fund market from FE fundinfo.
| Fund | YTD returns (%) | Fund | YTD returns (%) |
| Morg Stnly Global Endurance | 50.84 | MS INVF Global Opportunity | 26.52 |
| AZ Equity Global Growth A-AZ | 28.34 | Franklin Innovation | 25.09 |
| MS INVF Counterpoint Global | 27.78 | JPM Global Unconstrained Equity | 18.75 |
| MS INVF Global Opportunity | 26.52 | Global X Autonomous and Electric Vehicles ETF | 17.83 |
| Franklin Innovation | 25.09 | Invesco Global Focus Equity | 17.8 |
| PGIM Jennison Global Equity Opportunities | 23.23 | Allianz Allianz Choice Global Equity | 14.92 |
| Guinness Global Innovators | 21.73 | Amundi HK Disruptive Opportunities Equity Classic Dis | 13.82 |
| MS INVF Global Insight | 21.5 | PineBridge Global Focus Equity | 13.45 |
| Royal London Global Equity Select (IRL) | 21.33 | Principal International Equity | 13.19 |
| Invesco Global Founders & Owners | 21.08 | Capital Group New Economy Fund (LUX) | 12.94 |
| HSBC Islamic Global Equity Index | 20.2 | T. Rowe Price Global Select Equity | 12.89 |
| JPM Global Unconstrained Equity | 18.75 | Templeton Select Global Equity | 12.81 |
| Multipartner SICAV Baron Global Advantage Equity | 18.3 | Allianz Best Styles Global Equity | 12.62 |
| VanEck MSCI World ex Australia Quality ETF | 17.99 | Lyxor MSCI World ESG Leaders Extra (DR) UCITS ETF | 12.52 |
| Franklin Disruptive Commerce | 17.53 | Allianz Global Equity Unconstrained | 12.5 |
| Natixis Loomis Sayles Global Growth Equity | 17.22 | Invesco Pooled Pooled Investment Global Strategic Equity | 12.12 |
| Amundi POLEN CAPITAL GLOBAL GROWTH | 17.16 | Natixis Thematics Safety | 11.79 |
| Dominion Global Trends Managed I | 17.02 | Invesco Global Equity Income | 11.62 |
| Invesco Global Focus Equity | 16.99 | Ninety One Global Strategic Equity | 11.62 |
| Lyxor MSCI World Climate Change (DR) UCITS ETF | 16.58 | Principal GIF Global Responsible Equity | 11.51 |
So far in 2023, within the Hong Kong international equity sector, only six (3.5%) out of 172 strategies have managed to outperform the MSCI World Index, the widely used global equity benchmark.
Similarly, in the Singapore international equity sector, just 31 strategies (5%) out of 602 strategies managed to outperform the MSCI World Index year-to-date.
There were a few global equity funds however that comfortably outperformed. These included funds run by Morgan Stanley’s Counterpoint Global team, which stand out with strong returns.
Morgan Stanley’s Global Opportunity, Counterpoint Global, Global Endurance and Global Insight all feature in the top performers year-to-date. They share an investment philosophy of focusing on bottom-up analysis and investing in companies with what they think have inherent sustainable competitive advantages.
The Morgan Stanley Global Endurance fund stood out as the best performer with a 50.84% return year-to-date. It runs a fairly concentrated portfolio of 36 stocks with a focus on companies in the mid-cap space.
It is worth noting however that the strategy was down over 67% in 2022, so despite the strong performance year-to-date it hasn’t made up the gains from its peak.
This was a common feature among the top-performers year-to-date: bottom-quartile performance over a longer time-frame.
This is due to the fact that many of the high growth funds that have performed well this year were down significantly during 2022.
Among the Hong Kong funds, three of the top five performers year-to-date have bottom-quartile returns over three years. Among the Singaporean funds, seven out of the top 10 were bottom-quartile.
However, there were a few funds that did deliver top-quartile returns both year-to-date and over a longer time frame. In the Hong Kong market, these were PineBridge Global Focus Equity and Principal International Equity.
The PineBridge fund follows a growth at a reasonable price (GARP) strategy with a concentrated portfolio of developed market blue chips such as Microsoft, JP Morgan and AstraZeneca. The Principal fund on the other hand has over 387 positions spread across the US, Europe, Japan and Asia Pacific.
In Singapore, the Invesco Global Founders & Owners stands out with top performance year-to-date and over three years, and the Guinness Global Innovators with top performance year-to-date and over five years.
Both of these funds run concentrated portfolios, with the Invesco fund focusing on companies where a founder or individual has a material share ownership represented in either management or the board of directors. This includes companies such as Constellation Software, 3i and Berkshire Hathaway.
The Guinness fund on the other hand focuses on companies where innovation is driving growth in the companies or their industries. Its biggest holdings are in the semiconductor sector, which has benefitted from a boom in demand for artificial intelligence compute.
