Leaders Conversation Panel 1 | CIO House Views for 2018

Within global markets, valuations are high, yields are compressed and volatility is unusually low. At the same time, uncertainty looms large and systemic risks in terms of growth and geopolitics remain. Chief investment officers (CIOs) at private banks are being challenged on multiple fronts: the effectiveness of traditional asset allocation strategies is being called into question, while there is a pressing need to be more active on the tactical front to take advantage of short-term opportunities. Further complicating matters is the fact that Asian HNWIs continue to invest with a home bias, which means CIOs need to develop strategies with a local tilt.

At this juncture, how do CIOs view markets, economies and the asset allocation strategies of the region’s private banks? What are the predominant structural themes that private banks are focused on? Are investors in Asia expected to remain yield-focused and cash-rich for the foreseeable future?

Leaders Conversation Panel 2 | Closing Asia’s equity gap

Despite concerns about rich valuations, global equity markets continue to grind to new highs. However, Asian HNW participation has, for the most part, been light, with recent inflows still significantly concentrated in fixed income and cash. At the same time, asset and wealth managers have made concerted efforts to promote various plays, ranging from low volatility equity strategies to investments into emerging markets.

How are private banks utilising funds within their advisory businesses to boost equity exposure? What can the industry expect if and when volatility returns?

Workshop 1 | Buy High, Sell Low

Emerging markets are on the cusp of a secular bull market after several years of disappointing returns. These economies are in the early stages of a fundamentals- and earnings-driven rebound, making them particularly attractive relative to developed markets. A dividend-supported total return approach has shown potential to outperform broader emerging markets – a trend we believe will continue. Dividend-paying stocks, which provide investors with income streams, also assist investors by offering superior capital preservation in bear markets. Our behavioural finance-focused approach can capture emerging market inefficiencies, offering clients an active, high dividend strategy with strong outperformance potential.

Workshop Host:

• Kunal Ghosh, Managing Director, Portfolio Manager, Systematic Equity, Allianz Global Investors

Workshop 2 | Diversifying Away from Asian High Yield to Hidden Gems Like Asian Local Currency and Asian Investment Grade

Some market participants expect that the Federal Reserve’s balance sheet reduction and rate hike programmes could end the bond bull market. However, we believe the pace of balance sheet reduction will be gradual and the scale of the programme will be too small to have a meaningful impact, whereas expectations for rate hikes will be moderate. Against this backdrop, and coupled with strong fundamentals and improving corporate earnings in Asia, we remain positive on regional bonds. However, instead of focusing mostly on Asian high yield, we will diversify more into Asian local currency and Asian investment grade, targeting in particular the new opportunity to invest in China’s onshore bond market through various channels like Bond Connect and the interbank bond market. Below are the 2018 investment trends we forecast:

1. Asia corporates: Decent carry + alpha opportunities
2. Asia local currency bonds: High real yield + currency appreciation
3. Investment grade: Regained traction
4. China onshore: Vast hunting space

Workshop Host:

• Pheona Tsang, Head of Fixed Income, BEA Union Investment

Workshop 3 | Investment opportunities in subordinated debt

The search for yield continues, but it is becoming harder for investors to find attractively priced bonds.

Investing in subordinated debt allows an investor to capture an attractive additional risk premium while maintaining exposure to what are typically investment grade rated financials or corporates. In the current environment of low yields and spreads, this segment of the market offers attractive risk/return opportunities.

Workshop Host:

• Maurice Meijers, CEO Robeco Singapore and Managing Director for Fixed Income Investments, Robeco

Workshop 4 | How to seek cash+5% in a world of low numbers?

Investors are facing an increasingly turbulent global market environment in a world of tremendous change and disruption. After a nine-year bull market since the financial crisis and the rise of equity valuations, political uncertainties and secular trends all point to lower growth and returns. How can investors continue to seek steady investment return streams without having to move up the risk spectrum or venture into unfamiliar terrain? During this interactive session, Aberdeen Standard Investments will discuss how to attain cash+5% in the current low-return market environment. Specifically, we will unveil the key market themes and investment opportunities that are currently featured in Standard Life Investments’ award-winning multi-asset absolute return strategies. We will also share views on plausible black swan scenarios and discuss approaches to mitigate potential drawdowns.

Workshop Host:

• Dongyue Zhang, Investment Director, Multi-Asset & Macro Investing, Standard Life Investments