FSA analysed FE data for funds registered for distribution in Hong Kong and/or Singapore with at least ten years of track record.
The universe, which included all asset classes, resulted in only around 360 funds out of a universe of 1,300 outperforming their benchmarks.
10-year outperformers
Emerging Asia funds were well-represented in the top twenty. Two India equity funds stand out for delivering the highest relative return vs their benchmarks over the past ten years. They are: the First State Indian Subcontinent Fund (FSA profiled it in its Head-to-Head feature), and the IDFC Premier Equity Fund.
The first product is benchmarked to the MSCI India index and the second to the S&P BSE 500 index.
Among the top twenty equity funds that have most outperformed their indices as measured by relative return over the past ten years, seven are India funds, four are Apac ex-Japan small cap funds, three invest in European and two in Chinese equities.
Relative return measures the excess return of the fund with respect to that of its benchmark. Since the number is calculated using ratios of fund prices and index values, a 5% annualised relative return does not necessarily mean that the fund brought in exactly 5% more than the index, but it is a good indication of the extent of the fund’s out- or underperformance.
Top five funds outperforming their benchmarks
| Fund | 10-yr relative return, annualised | Benchmark |
| First State Indian Subcontinent | 9.06% | MSCI India |
| IDFC Premier Equity Growth | 8.30% | S&P BSE 500 |
| UBS (Cay) China A Opportunity | 7.13% | MSCI China A |
| HSBC GIF Asia Ex Japan Equity Smaller Companies | 7.04% | MSCI Asia Pacific ex Japan Small Cap |
| Aberdeen Smaller Companies | 6.22% | MSCI Asia Pacific ex Japan Small Cap |
Data: FE, 10 September 2017, performance in US dollars
10-year underperformers
On the flipside, the funds that most underperformed their indices over the past ten years were global funds, many focused on energy and natural resources. The Schroder ISF Global Energy Fund, which tops the list, is one of four funds in these two sectors that have made it to the bottom 20.
While two other products are benchmarked to the MSCI World Index, which may not reflect well the fortunes of the energy sector, the Schroders fund is benchmarked to the MSCI World Energy index, so the underperformance stands out.
The UOB United Asean Fund and the Legg Mason Clearbridge Growth Fund round out the bottom three. The poor performance of the fourth fund on the list, the UBS (Lux) Equity Global Sustainable Innovators Fund underscores doubts investors may have about the effectiveness of sustainable investing methods.
Bottom five funds underperforming their benchmarks
| Fund | 10-yr relative return, annualised | Benchmark |
| Schroder ISF Global Energy | -8.85% | MSCI World Energy |
| UOB United Asean | -7.77% | MSCI AC Asean |
| Legg Mason Clearbridge Growth | -7.63% | Russell 1000 Growth |
| UBS (Lux) Equity Global Sustainable Innovators | -7.61% | MSCI World Small & Mid Cap |
| GAM Composide Abslute Return Listed | -7.55% | MSCI AC World |
