Assessing the Performances of China-Focused Mutual Funds in 3Q15




Previously in this series, we outlined the four China-focused mutual funds that we’ll be evaluating. These include the following:

  • The AllianzGI China Equity Fund Class A (ALQAX)
  • The RS China Fund Class A (RSCHX)
  • The US Global Investors China Region Fund Investor Class (USCOX)
  • The AC One China Fund Investor Class (ACOCX)

Now let’s look at their individual performances.

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For fund performances, we’d be using the total return measure. Total return includes changes in the NAV (net asset value), capital gains distributions (if any), and if you’ve chosen so, the reinvestment of those distributions.

In the quarter that ended on September 30, 2015, the returns of all four of our selected funds were negative. The returns of ALQAX, USCOX, and ACOCX were down by 21.5%, 21.2%, and 21.1%, respectively, while the returns of RSCHX dropped by 20.4%.

USCOX and the ACOCX posted the most negative returns in the YTD (year-to-date) period, with a -11.5% return as of September 30, 2015. The returns of ALQAX and RSCHX were close, coming in at -7.5% each.

Benchmarks for mutual funds

It’s important to state here that mutual funds have stated benchmarks. USCOX, for example, has the Hang Seng Composite Index as its benchmark. ACOCX has stated no specific benchmark, but we can compare its performance to the MSCI China Free Index. ALQAX and RSCHX have the MSCI China Index as their benchmark.

TheMSCI China Index returned -23.2% for the quarter that ended on September 30, 2015.Tencent Holdings (TCEHY), China MobileCHL), and CNOOC (CEO) are included in the top ten holdings of the MSCI China Index and made up 23.5% of the portfolio weight as of September 30, 2015.

The Hang Seng Composite Index returned -20.9% in the same period. The returns of the MSCI China Free Index stood at -22.4% for the quarter that ended on September 30, 2015.

In the next part of this series, we’ll look at the portfolio composition of two funds—the AllianzGI China Equity Fund Class A (ALQAX), and the RS China Fund Class A (RSCHX).


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