In a sector of 86 funds – many of them flagship names such as First State Asia Pacific and Aberdeen Asia Pacific – it is perhaps surprising that no portfolio has managed the feat.
In the similarly sized UK Equity Income sector, three funds delivered top-quartile returns over the two periods, and in IMA Europe ex UK, six funds managed the accolade.
Only nine funds in IMA Asia Pacific ex Japan managed first- or second-quartile performance over both five-year periods, and of these only four are open to retail money.
Hugh Young’s highly rated Aberdeen Asia Pacific portfolio is not among these, due to its third-quartile performance between October 2002 and October 2007.
There is a place for Angus Tulloch’s First State Asia Pacific fund though, which is number-one in the sector in cumulative terms over 10 years with returns of 390.32 per cent. However, it has been soft-closed since 2004.
Performance of funds vs sector over 5-yr periods
| Name | Returns Oct 2002 - Oct 2007 (%) | Returns Oct 2007 - Oct 2012 (%) | 10-yr returns (%) |
| First State - Asia Pacific | 209.71 | 62.76 | 390.32 |
| Schroder - Institutional Pacific | 221.84 | 47.33 | 359.49 |
| Fidelity - Institutional South East Asia | 225.42 | 42.08 | 346.45 |
| Fidelity - South East Asia | 269.83 | 20.14 | 326.34 |
| Investec - Asia Ex Japan | 237.75 | 24.82 | 310.57 |
| M&G - Asian | 209.77 | 30.98 | 294.4 |
| CF Canlife - Asia Pacific | 209.71 | 62.76 | 291.61 |
| AXA - Rosenberg Asia Pacific Ex Japan | 213.43 | 25.62 | 281.55 |
| F&C - Asian Alpha | 221 | 20.28 | 274.15 |
| IMA Asia Pacific Excluding Japan | 213.46 | 15.91 | 253.19 |
Source: FE Analytics
While some of the names were in the first or second quartile in the first five-year period, they have underperformed their sector average as a result of fund closures.
Kim Lee’s CF Canlife Asia Pacific is the smallest of those on the list, with just £96m assets under management (AUM).
Over the last decade, it has returned 291.61 per cent, compared with 253.19 per cent from the average Asia Pacific ex Japan fund. It has a minimum investment of £500 and a total expense ratio (TER) of 1.64 per cent.
Performance of funds vs sector over 10-yrs
Source: FE Analytics
M&G Asian is another fund that has managed consistent outperformance, although last week it was dealt a blow following the departure of Michael Godfrey as co-manager.
However, Matthew Vaight continues to head up the portfolio and will now become lead manager. The fund has marginally outperformed Lee’s over the period, with significantly less volatility. It has a minimum investment of £500 and a TER of 1.71 per cent.
Fidelity South East Asia was the standout performer over the first five-year period, boasting returns of close to 300 per cent.
Although it has found the last five years more challenging, it has managed to protect against the downside more effectively than most of the other funds in its sector.
Greg Kuhnert’s Investec Asia ex Japan completes the list of four retail funds. The £132m portfolio has returned 310.57 per cent over the period and has a minimum investment of £1,000 and a TER of 1.68 per cent.
While Hargreaves Lansdown’s Richard Troue (pictured) was surprised by the results of the study, he believes the highly volatile nature of the Asia Pacific market means investors should look further than a five-year period to judge a fund.
"I’d say five years is your absolute minimum for assessing a fund’s performance – ideally, you want to look at 10 years because the markets are constantly changing and very volatile," he said.
"A fund like First State Asia Pacific is likely to fall short when the markets rally, which is likely to have impacted the first five-year period quite considerably."
"However, if you look at this fund’s annual returns relative to its benchmark since launch, then you see a different picture."
According to Troue, First State Asia Pacific has produced annual returns that are 6 per cent ahead of its MSCI AC Asia Pacific ex Japan benchmark since the fund's launch.