Foreign vs domestic A-share funds, which has done better?

Added 28th July 2016

FSA compares the three-year performance of foreign funds investing in A-shares with their mainland counterparts.

Foreign vs domestic A-share funds, which has done better?

Based on data from FE Analytics and Morningstar China, FSA selected eight funds managed by foreign fund management firms, and 19 funds managed by mainland-related groups, which are mainland domiciled funds selling in Hong Kong via the Mutual Recognition of Funds scheme (southbound funds).

For the comparative analysis, both groups of funds had to be available for sale in Hong Kong and performance has been denominated in US dollars.

The eight funds from foreign managers that primarily invest in A-shares:



 Fund name 

 gross return
 as of  22/7/2016




 Allianz China A-Shares



 all A-shares via QFII 


 BlackRock China A-Shares
 *incepted in 22/8/2013



 primarily A-shares via QFII or  Stock Connect 


 HS China A Share Focus



 at least 70% A-shares via QFII


 Manulife China A  Segregated  Portfolio



 at least 70% A-shares 


 BEA China A Share Equity



 at least 70% A-shares mainly  via QFII


 Templeton China  Opportunities



 Mainly A-shares 


 HS China A-Share  Flexipower 



 at least 70% A-shares via QFII


 Invesco China
 Opportunity  III 



 at least 70% A-shares 






Source: FE Analytics, fund factsheets


Compared with the MSCI China A index, only the Allianz fund has beaten the benchmark (78.2%), which returned 42.8% in the same period.




In general, the 19 MRF products have performed much better than the rest of the funds.


   Fund    3-year gross return 
(as of 22/7/2016) 


 Dacheng Domestic Demand Growth Mixed Fund 

 127.78%  36.19 
 2  GF Industry Leaders Mixed Assets Fund   122.07%    34.93
 3  CCB Principal Selected Growth Mixed Asset Fund   121.94%  28.24
 4  HSBC Jintrust Large Cap Equity Securities  Investment Fund  119.28%   30.54
 5  HSBC Jintrust Dynamic Strategy Mixed Securities  Investment Fund  114.54%   32.55
 6  China Southern Selected Value Mixed Securities  Investment Fund  110.58%  32.5

 CIFM China Sector Rotation Fund 

 81.39%  39.95 
 8  Bosera Yufu CSI 300 Index Fund  73.36%  28.93 
 9  ChinaAMC Xinghua Mixed Securities Investment Fund  73.31%  30.39 
 10   Bosera Value Mixed Fund   69.16%  27.47 
 11  BOC Income Mixed Securities Investment Fund   64.74%  30.65
 12  Franklin Sealand China Prospect Mixed Assets Fund  56.98%  31.78 
 13  ICBCCS China Core Value Mixed Fund   56.8%  32.58
 14  Invesco Great Wall Core Competence Mixed Securities  Fund   56.57%  32.93
 15  BOCOM Schroder Growth Mixed Securities Investment  Fund    55.98%  33.27
 16   BOCOM Schroder Stable Allocation Mixed Securities  Investment Fund  50.72%  35.63 
 17  BOC Sustainable Growth Mixed Securities Investment  Fund  48.9%  37.08 
 18  CIFM China Emerging Power Fund  43.86%  40.52 
 19  ICBCCS China Prudent Growth Mixed Fund  22.97%  40.32 
   Average  77.4%  33.5

 Source: Morningstar


Morningstar China research analyst Lim Yao attributed the higher performance of the MRF funds to several factors, including local knowledge.

"MRF funds are operated by local fund managers, who would be more familiar with the China market than foreign asset managers."

Additionally, share class investments differ. Non-MRF funds can invest in either A- or H-shares but MRF funds are only allowed to invest in A-shares.

The different share classes may also account for the lower average volatility of the funds managed by foreign asset managers because Hong Kong listed equities (H-shares) tend to be less volatile than their counterparts listed on China's domestic markets (A-shares).

Meanwhile, because MRF funds started selling in the SAR only at the beginning of the year, FSA used the fund's performance in the onshore China market before MRF (a different share class than A or H) in the chart above.

Luke Ng, senior vice president of research at FE Analytics, noted that because the share class is not available in Hong Kong, the performance is for reference only.

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