GSAGX Had Superb Year Leading up to February 2016


Oct. 8 2020, Updated 1:35 p.m. ET

Goldman Sachs Asia Equity Fund performance

In this article, we’ll outline the performance of the Goldman Sachs Asia Equity Fund Class A (GSAGX). The fund is invested in the stocks of companies such as Alibaba Group Holding (BABA), Cognizant Technology Solutions (CTSH), Taro Pharmaceutical Industries (TARO), International (CTRP), and Advanced Semiconductor Engineering (ASX).

From a purely net asset value return standpoint, GSAGX was among the top three funds in both the one-year period ended February 29, 2016, and in 2015. It stood third and first, respectively, in its peer group for the aforementioned periods. It was the only fund to post positive returns in 2015.[1. When we refer to the peer group, we mean the group of 12 funds chosen for this review.] For return comparison, we’ve chosen two ETFs: the iShares MSCI All Country Asia ex Japan ETF (AAXJ) and the WisdomTree Asia Pacific ex-Japan ETF (AXJL).

To evaluate benchmark-related metrics, we’ve chosen AAXJ as the benchmark for all funds in this review, as it tracks the MSCI All Country Asia ex Japan Index.

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Other metrics

GSAGX’s standard deviation, or its volatility of returns, in the one-year period until February 29 was 18.7%. This was much higher than both AAXJ’s 17.9% and the peer group’s average of 16.5%. It was the highest among all funds in this review.

The fund’s risk-adjusted returns, calculated via the Sharpe Ratio, were negative for both the one-year period ended February 29 and for 2015. Evaluating a negative Sharpe Ratio may be misleading, so we’ll avoid that.

GSAGX’s information ratio, calculated with AAXJ as the benchmark, was 1.56 for the one-year period ended February 29, placing it first among the 12 funds in this review. The information ratio shows the consistency of a fund manager along with the measure of his ability to generate excess returns over a benchmark. The higher the reading, the better the consistency. For 2015, the fund’s information ratio also placed it first among its peers.

A note to investors

Apart from having the best information ratio among its peers, GSAGX had the best alpha for both the one-year period ended February 29 and for 2015. The fund’s performance in year-to-date 2016 has been lacking, though. Its volatility has not been the highest, but other metrics have been hurt badly.

Investors would do well to assess the performance of the fund during longer periods and across market cycles in order to see whether this superior performance was just a one-off.

In the next article, we’ll look at the JOHCM Asia ex-Japan Equity Fund Class I (JOAIX).


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