Which China equity funds hug the top and bottom?

Added 10th August 2017

FSA picks the most consistently outperforming and underperforming funds in the China equity category.

Which China equity funds hug the top and bottom?

The performance of China and Greater China equity funds is in the spotlight in FSA's ongoing analysis of mutual fund investment options available to investors in the region. The goal is finding the most consistent performers at the top and bottom.

The selection criteria, which is similar to the Bestinvest method in the "Spot the Dog" fund report, is all funds registered for distribution in Hong Kong or Singapore with more than three years of track record and a defined benchmark. The fund performance is relative to the benchmark, quantified as the relative reurn.

The most consistent outperformers are the funds that bettered their benchmark by more than 5%, annualised, over the last three years ending 30 June, and which also outperformed the benchmark in each of the three 12-month periods. We used a mirror image of these criteria to identify the poorest performers.

Most consistent outperformers

Fund 3-year return Active Share Benchmark OCF
Comgest Growth Greater China 54.86% 80.18 MSCI Golden Dragon 1.62
NB China Equity A 52.14% 56.85  MSCI China 2.15
Vontobel mtx China Leaders C 50.57% 45.69 MSCI China 2.82
GAM Multistock China Evolution Equity B 49.51% 62.72 MSCI China 1.90
UBS (Lux) Equity Greater China P 45.63% N/A  UBS Greater China Index 2.42
Fidelity China Focus A 42.86% 59.61  MSCI China Capped 10% 1.91
Data: FE, Morningstar, return in US dollars, 30 June 2017

The best and most consistent outperformer of its benchmark in our sample was the Comgest Growth Greater China Fund, launched in 2001 and co-managed by David Raper, Baijing Yu and Jasmine Kang. The fund is currently invested 40% in telecom, media and technology, with two technology and two financials among its top five holdings.

Most persistent underperformers

Fund 3-year return Active Share Benchmark OCF
GF China Growth -16.20% 75.15  MSCI China 3.77
First State China Focus -15.29% 97.19 MSCI China 2.13
Pinebridge Greater China Equity -2.20% 44.78 MSCI Golden Dragon 2.16
Value Partners China Greenchip 2.33% N/A  Hang Seng HSI N/A
JGF-Jupiter China Select 4.78% 74.84  MSCI China 1.72
Data: FE, Morningstar, return in US dollars, 30 June 2017

The poorest and most persistent underperformer vs its benchmark was the GF China Growth Fund. It was launched in 2013, it does not disclose its manager and it charges 3.77% of ongoing charges, the highest among funds in this category. The fund currently has $9.1m of AUM.

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