At the Hubbis Investment Solutions Forum 2018 in Singapore on June 7th, we interviewed leading industry experts. Want to know what you missed?
Justin Kendrick
Ingenia Consultants
I think one of the key trends is that people will need to diversify into non-traditional assets. We have got a lot of obstacles ahead I think in terms of traditional fixed income which could well create capital losses over the next two to three years. Equities I think will struggle, particularly US equities are not cheap. So, I think diversifying into floating rate instruments is a way to insulate yourself against rising rates and fixed income. Other assets that are lower volatility and offer lower correlations are attractive at this point.
Ranjiv Raman
Schroders Wealth Management
In terms of the markets and where we see the opportunities, we are seeing a bit of change in the way clients think and clients behave. There is an increased focus on more modular solutions away from like the fixed bracketing into products. There is a bit more into bespoke mandates, tailored solutions where clients are looking increasingly at wealth planning, income requirements, sending children to education, all of that is coming into play. We are increasingly focused on that. Encouragingly what has changed in our discretionary mandates and in terms of our traction and penetration has been this area where clients are coming to us and say, look, we associate Schroders with asset management, investment solutions and that’s what we are about, not products but actually finding solutions for our clients.
Leon Mirochnik
Enhanced Investment Products
We are an Asia focused asset management company, started in 2002. We split the world into alpha and beta products. We do hedge funds on the alpha side, long only enhanced index funds on the beta side, along with a suite of exchange traded funds. We work with Hubbis primarily on promoting our ETF business. There has been a significant pickup in the wealth management community of exchange traded funds all over Asia and it is only progressing and growing from here on out. So, we are looking forward to this event and working with the wealth management community in Singapore.People buy ETFs for a variety of reasons, some of them include transparency, low cost, intraday liquidity and obviously trading on screen from an intraday price discovery standpoint is one of the reasons that they buy ETFs.
Manoj Prajapati
Allfunds Singapore
Allfunds is delighted to be in Singapore. Allfunds is the largest B2B platform helping institutional clients like banks, insurance companies to execute funds through their platform and offer more than 60,000 funds. Allfunds is delighted to be in Singapore serving institutional clients not only in Singapore but even in nearby ASEAN countries like Philippines, Thailand, Malaysia, where we are having active dialogues and clients do see a proposition for using our platform to execute third party funds through us without the need of having different arrangements. We are glad to be partnered with Hubbis and delighted to be over here today.
Lavanya Chari
Deutsche Bank Wealth Management
I work for Miles Software Solutions as Senior Vice President, Products. As part of our focus as far as Philippines is concerned the biggest portion we are looking for is on the KYC, automisation of KYC. Also making sure that the other part of what BSP requires is how do we make sure your compliance is okay. The compliance part is the biggest focus area for BSP right now, and our systems help us do that where you are getting configurable rules, anything which you can do. The rule engine of our application is supported by what we have implemented for UCITS in Europe. So, it is a very powerful engine which is do it yourself compliance. This is where we feel the focus for digital will be in Philippines.
Rohit Jaisingh
DBS Bank
I think the key change that is going to come about is because of the role of technology. We have already seen technology having a huge impact on the industry over the last three to five years, that is just going to accelerate, that is just going to increase in momentum. Today technology is not so smart as to be able to replace human advisors, that equation is going to change over the next 8 to 10 years as you have big data, artificial intelligence contributing developing, you can easily envisage a situation where the robo will take over the role of the investment manager because they are able to do that role in comprehensive fashion, cost effective fashion and devoid of the biases of behavioural finance which the human beings bring to that equation.
Chun Him Tam
RBC Wealth Management
I guess the changes going forward on the investment side I think the regulation is quite a big challenge for all the private banks, for the investment professionals, and the difficulty with regulations, they are changing every single month and every single quarter and this has an impact on the investment side. I would say suitability is a big buzzword these days. Obviously in the past 10 to 15 years we have gone to from plain vanilla products to more complicated products, and with this suitability and regulatory pressure we need to simplify the products more. So, we will see a trend towards from complex complicated products towards more plain vanilla products and this will change quite a bit and this will meet our clients’ demands.
David Gaud
Pictet
When we talk about DPM there is often the perception that it is a bit of a black box which is stealing away the responsibility from the client and his capacity to follow up on what the fund manager or the private banker is doing with his money. Well, this is not entirely true. DPM offers a lot of transparency and it offers some customisation aspects which the clients can actually adjust in time. So, it is not completely disconnecting the assets of the clients from his own and switching away for a year and with no proper connection and it offers actually some opportunities which are customised but at the same time will follow a pattern which we agree with the client about asset allocation. To give you an example, at Pictet, we do have global allocation which we propose to the client for DPM. We do also offer what we call an Asia Tilt Grid which means that it replicates in terms of assets, the segmentation we do at the global level, but instead of putting some global funds or global assets we put some Asia bonds, we put some Asia equity, so for the clients and in particular for the Asian clients who have been very much Asia centric, they are looking for global solution but are still keen to capitalise on Asia more specifically. The DPM actually is able to offer them that opportunity. So, they know that in the future there will be that framework which will be working on with a good proposition on Asia and probably make them actually closer to the solution, they understand it better. If you sell a DPM global solution, if you propose global solution that maybe more complicated for some Asian clients who maybe say why would I go to Europe with my investment and maybe already bought some property or things but Europe is not in a great situation right now, why would I take more risk while at my doorstep there is ASEAN, there is India, there is China which are booming. So this is on the DPM side there is also some flexibility.
Christian Abuide
Standard Chartered Bank
Development in terms of DPM a few things we are working on but always keeping true to basically our way of doing business which we don’t manage single securities and we basically exploit third party relationships with boutique investment partners, so we are trying to extend that in terms of the range of products that we offer clients, we are not thinking one quarter or two quarter ahead but thinking what would we want to have on our platform in 2018 to 2022 and likely beyond. So that is the kind of thing that we are thinking about, China A shares or China fund which by the way is not a fund but is a separately managed account, small caps on a global basis, global unconstrainted fixed income which is something which has brought out, these are some of the things. UK resident nondomicile and transforming some of our existing strategies for that particular market segment. Some of the things we are working on.
Olivier Robine
Commerzbank
Michael, we have had a correction in February and the clients have been surprised to see the markets coming back to the level where we were at the start of the year. So now there is a bit of anxiety because the question is are we back into the long term rally or actually are we going to be in the zone of turbulence that could be as well caused by the geopolitical problems that we have at the moment.For such kind of markets you could have products that are based on range where typically you can have autocalls that are called when you stay within range, this kind of work pretty well. Other type of products for the current market could be market neutral products. So that can work pretty well if you are in an environment where for the next six months you neither have a correction nor a proper rally.
Jeremy Sutch
Matthews Asia
Jeremy Sutch here, working for Matthews on the Asia small cap strategy. I am here in the Hubbis forum in Singapore and just have the opportunity and pleasure actually of talking to audience about the benefits that can be derived through active management in Asia. I am myself on the small cap portfolio but really just presenting what we at Matthews Asia do as kind of long term quality biased investors. I think there is huge opportunities in Asia, both in large and small, small being my area of expertise. I am really here just to educate and also get some conversation going with the crowd and get their own feedback.
Jean-Louis Nakamura
Lombard Odier
At Lombard Odier the reason why we are pushing out clients towards DPM is because we really think it is the best way for them to remove the emotion from managing their own personal assets, and through DPM especially if you manage the DPM through a multi-asset agnostic risk-based systematic solutions, very disciplined, avoiding the daily market noise from the market, you will help your client to remove this emotional part which most of the times will detract performance or will detract return from the asset management and if they offer much more disciplined approach which will help them remaining exposed to risk premium in the market in the long run and enjoying the long term benefit of financial markets.
Rebecca Sin
Commerzbank
My name is Rebecca and I am head of ETF sales trading and today I spoke about ETF liquidity. I did a lightening round on 20 questions in 10 minutes on everything you need to know about ETFs – exchange traded funds. Some of the highlights are how to select an ETF. Often times people select ETF based on AUM and management fee and what I discussed about was there are really five criteria for selecting ETF. There is liquidity, tracking error, performance, physical replication versus synthetic, as well as total cost of ownership. So, when you select an ETF you need to look at all of these different areas and not just the AUM and management fee. I also talked about the offerings that we have at Commerzbank. As one of the full-service providers for exchange traded funds, we offer research and advisory, we also help with the ETF selection process, so as a fund manager you can come to us and say I would like to invest into Japan and we can select the ETF that is appropriate for you. We also have a sales trading advisory business where we help with the execution of the process, so ultimately a lot of clients may not know whether they should trade agency, OTC, or creation redemption and we help with the liquidity and accessing ETFs through the various exchanges globally. We are also one of the largest market makers for ETFs in Asia. We market make more than 4000 ETFs globally in Asia, Europe, as well as US. Lastly, we have a fund solution business where we can provide custom baskets or model portfolio or fund of funds. Depending on what your needs are we are really the one stop shop for ETFs.
Paul Stefansson
UBS Wealth Management
What we are seeing now is we are seeing a big move towards algorithmic solutions like our systematic allocation portfolio which uses an algorithm to help people make their asset allocation decision which is the most important decision. The other area where we are seeing a lot of interest is sustainable investing which we think is certainly a wave of the future. We can see the trouble in the planet with climate change, the good news is we can save the planet and make money, so we are seeing a lot of growth there. We are also seeing tremendous growth with our UBS Advice which is essentially wrapping our technology in together with one fee for advice to clients, and clients are really liking that because they get advice on asset allocation and security selection but they get to make the final decision. So that’s really where we are seeing a tremendous amount of growth.
Basim El-Shoura
Allfunds Bank
My name is Basim El-Shoura. I lead the investment solutions team at Allfunds Bank, mostly covering the UK, Benelux and also Asia. I am based out of London. And for those of you who don’t know what Allfunds is, we are essentially Europe’s largest fund distribution platform and we have 360 billion of assets under intermediation across more than 57,000 funds. Today I am here in sunny Singapore and I am talking to people and it is great audience about ESG and also our excellent fund research capabilities, those are some of the services that we offer to our clients.
Julien Le Noble
Finantix Smartfolios
I am Julien Le Noble from Finantix Smartfolios. The panel today was extremely interesting. We discovered that digital innovation is at the forefront of what banks and wealth managers really want to deliver to their customers, whether it is about onboarding, whether it is about risk profiling, whether it is about the investment solution, the recommendation, digital tools really are aimed at augmenting the capabilities of the wealth managers and the bankers. Our solutions which include also a very performing and powerful quantitative overlay to the investment process can really add a lot of value to the wealth managers.
Tuck Meng Yee
JRT Partners
With market instability this year I think it is actually more important for investors to actually come to these types of conferences where it is not just about learning about what everyone else is doing in terms of investment direction but asking more granular questions in terms of what are they doing in terms of timing, risk management, in terms of communication and in terms of niche markets that they may have missed when the markets were much easier for them to make money from. If anything, right now it becomes a more holistic discussion where it is not about changing asset classes, it is about that and even within the asset class what to look for that has been ignored in the past because pretty much in one asset in credit for example virtually everything has made money. So right now for us within an asset class it is not about the broad brush investment grade or high yield, it is actually more about very specific credit deals that one can do, or are shown, it becomes very very granular at this point.