Best Private Bank – Fund Advisory Morgan Stanley Private Wealth Management Asia

Ernest Chan head of investment management services, Morgan Stanley Private Wealth Management Asia

MORGAN STANLEY PWM ASIA

2019 was characterised by a mature economic cycle and dented investor risk sentiment, with a U-turn in central banks’ behaviour and an uncertain geopolitical situation driving much of the short-term market movements. With a focus on quality rather than quantity, Morgan Stanley Private Wealth Management Asia in 2019 saw a reversion to fundamentals by only targeting those ‘best in class’ high conviction managers and mandates. In a year when markets saw a widening trade range and heightened uncertainties, the bank’s robust business and investment results vindicated its approach.

Well known for its immense depth and breadth of research globally, Morgan Stanley Private Wealth Management Asia took a holistic and fully integrated approach to providing fund advisory to clients. On its open-architecture platform, only those top-notch funds were selected, which then went through an in-depth due diligence and onboarding process, taking into consideration both operational and investment aspects.

When fixed income — especially fixed maturity bond funds — served as the major driver for fund inflows within the private banking industry in 2019, Morgan Stanley’s top-ranked in house research led and guided clients to diversify their portfolios into different asset classes and investment strategies. On the advisory front, key investment ideas of the bank were categorised into three segments: 1) secular growth themes with a focus on digitalisation of financial and China onshore opportunities 2) late stage investments with an income tilt and 3) evergreen and absolute return offerings concentrating on those funds that have a ‘tried and tested’ investment philosophy and portfolio construction process.

These three segments were gaining significant traction among the private clients throughout 2019, as investors continued to search for yield and alpha. As a result, a strong inflow with strong outperformance of these assets brought the bank’s fund penetration rate to a significant 51% as of October 2019.

“We are honoured to receive this award. For us it is an important milestone that reflects the evolution of our fund advisory business. The team’s focus is on offering a wide variety of best-in-class products which deliver on clients’ alpha expectations. Client satisfaction is the driver and we continually work to ensure we are delivering ‘the right product to the right client at the right time’.

Our platform benefits greatly from Morgan Stanley’s top-ranked macro and equity research. We seek to translate their thought leadership and ideas into investment opportunities and ultimately strong returns.

In 2019, we developed our diverse platform of top performing and innovative fund advisory products. We take pride in our ability to understand and meet the needs of the UHNW sector in such unpredictable and challenging market conditions.

Finally, we take this opportunity to thank our in-house and external asset management partners for their support in helping us achieve great outcomes for clients, and we look forward to continuing to offer our market-leading service and range of products into 2020 and beyond.”

- Ernest Chan, head of investment management services, Morgan Stanley Private Wealth Management Asia

Success in business could not be achieved without a robust pre- and post-sales client service. Based on the individual needs and requirements of each Morgan Stanley client, the bank followed a stringent KYC and risk profiling procedure which was an automated process which showed clients only investment opportunities that suited them and for which they were eligible. On after sales, Morgan Stanley maintained strong partnerships with various asset management firms and offered clients direct access to key portfolio managers and specialists, which significantly helped improve portfolio transparency and client satisfaction.

Morgan Stanley Private Wealth Management Asia is Asian Private Banker’s Best Private Bank – Fund Advisory for 2019.

ASIA IS FACING A PERIOD OF TRANSFORMATIONAL CHANGE, ECONOMICALLY, POLITICALLY AND TECHNOLOGICALLY.

ASIAN OPPORTUNITIES CALLING.

Baillie Gifford looks to embrace the opportunities afforded by this transformational change in Asia. We invest in companies disrupting the existing order, those looking to turn uncertainty into certainty while generating returns as their business models mature.

Net performance to 31 December 2019*:

Baillie Gifford Asia ex Japan Strategy Composite* MSCI AC Asia Pacifi c ex Japan † 10 years 142.34%

87.43%

Capital at risk. The Baillie Gifford Worldwide Asia ex Japan Fund is currently unseeded so we have included past performance information for the Baillie Gifford Asia ex Japan Strategy as an example of our approach as the fund adopts the same investment philosophy and process as this strategy. This information is not a guide to the potential performance of the Baillie Gifford Worldwide Asia ex Japan Fund.

The standardised past performance of the Baillie Gifford Asia ex Japan Strategy Composite (net) and the MSCI AC Asia Pacifi c ex Japan index was 29.51% vs 18.52% in 2019, -17.76% vs 14.12% in 2018, 55.73% vs 42.08% in 2017, -1.71% vs 5.76% in 2016 and -7.81% and -8.90% in 2015 † .

For professional investors only, not retail investors.

For the full picture, scan the QR code or visit www.bailliegifford.com, or email us at asiaenquiries@bailliegifford.com

*Source: Statpro, MSCI. US Dollars, cumulative returns as at 31 Dec 2019. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK clients. Both are authorised and regulated by the Financial Conduct Authority. Baillie Gifford Asia (Hong Kong) Limited 百利亞洲(香港)有限公司 is wholly owned by Baillie Gifford Overseas Limited and holds a Type 1 licence from the Securities and Futures Commission of Hong Kong to market and distribute Baillie Gifford’s range of collective investment schemes to professional investors in Hong Kong. Baillie Gifford Asia (Hong Kong) Limited 百利亞洲(香港)有限公司 can be contacted at 30/F, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong, Telephone +852 3756 5700. † Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or fi nancial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

Marc Van de Walle global head of products, Bank of Singapore

BANK OF SINGAPORE

After a challenging year, equities saw an encouraging rebound in 2019, with major stock markets across both developed and emerging markets recording impressive returns. On the back of a robust investment and product team with leading equity research and advisory capabilities, Bank of Singapore offered a comprehensive suite of equities and derivatives strategies, delivering effective solutions and strong returns for clients.

The backbone of the bank’s equity advisory business was its stock selection ability, based on its deep understanding of the market. That understanding had grown out of the strength of the in-house research analysts at the Singaporean bank, combined with external industry research and trading capabilities — as part of the bank’s open architecture model.

As a clear proof of its superior ability to generate positive investment ideas, the investment team’s ‘high conviction list’ — run with utmost transparency to both RMs and clients — generated outstanding returns. As of end August 2019, the hit rate of the team’s investment ideas stood at 89% year-to-date, with an average outperformance of 3.3% against its benchmark.

Beyond directional trading ideas, Bank of Singapore in 2019 also introduced multiple market-neutral investment products to help clients generate attractive returns, regardless of market direction. Innovative products in this area were the dispersion notes around key secular themes and outperformance notes, which have enjoyed strong performance since launch.

In terms of key enhancements to the advisory platform, Bank of Singapore’s equity business zeroed in on data. The business put into practice ‘targeted advisory’ with an applied machine-learning model, whereby content was matched to clients, RMs, and

“We are proud of our equity advisory team for receiving this well-deserved accolade. At Bank of Singapore, we take our investment process very seriously, considering ideas debated with much intellectual rigour with input from the team of inhouse research analysts, as well as a mosaic of information gleaned from across our unique open architecture model.

Our equity advisors across Singapore, Hong Kong, and Dubai come from diverse backgrounds in a deliberate attempt to spur diversity of thought, while being client-centric. Over the past year, we have given free rein to technology and data to give our advisors an unprecedented understanding of our business, transactional trends, and client positions. This has empowered them to make better investment decisions to achieve clients’ desired return and risk tolerance.”

- Marc Van de Walle, global head of products, Bank of Singapore

ICs based on relevancy. Eight months into 2019, over 20% of the bank’s equity advisory content was delivered in a targeted manner, and the number has kept rising since.

An enhanced platform with innovative trading ideas backed by a robust team has earned Bank of Singapore Asian Private Banker’s accolade of Best Private Bank – Equity Advisory.

Jeffrey Yap regional head of FICC, Asia, HSBC Private Banking

HSBC PRIVATE BANKING

The fixed income market in 2019 was overshadowed by geopolitical risks, US-China trade tensions and an inversion of the yield curve. With significantly volatile price movements driven by these events, HSBC Private Banking’s fixed income team went from strength to strength, actively advising clients to move ahead of the markets and rebalance their bond portfolios accordingly.

Worth mentioning, HSBC’s Asia Focus List got expanded to 3,500 bonds in 2019 from 2,800 previously, in various currencies across different regions. Independent from the bank’s global research team, the fixed income desk has credit lines with over 50 different counterparties, ensuring it can source liquidity and find best execution for clients on its open architecture platform. In 2019, not only did its high conviction bond list post zero default events, but over 75% of the bank’s high conviction trade ideas outperformed their respective index benchmarks, as the bank stringently selected and actively monitored the high conviction names.

HSBC’s franchise as a fixed income house is well established. Beyond secondary market trading and execution, its participation in bond IPOs and private placements is well recognised. In 2019, HSBC accepted market or limits orders and kept clients informed on the deal progression in a timely manner, helping them gain exposure in the primary bond market. For clients interested in making a sizable placement with a specific issuer, the bank collaborated with its investment banking arm and external counterparties to engage directly with issuers and originate private placement subscriptions.

Additionally, the bank’s bond borrowing and lending programme enabled investors to enhance their income by receiving a lending yield while still retaining the economic benefits, such as coupons and corporate

“We are thrilled to be named Asian Private Banker’s Best Private Bank for Fixed Income Advisory. In 2019, our team was able to capitalise on the strength of HSBC Private Banking to successfully navigate challenging market conditions. This is a clear testament to our human capital investment in the past year by bringing on senior professionals from investment banks and asset management firms to strengthen and extend our lead in the market. Our unique and proprietary investment analysis approach continue to help us guide our clients to achieve outperformance in investment returns. We are proud to be serving this key element of our clients’ portfolios as an important part of our industry-leading private bank in Asia.”

- Jeffrey Yap regional head of FICC, Asia, HSBC Private Banking

actions. In a year with increased uncertainties, this strategy kept gaining traction among clients.

A robust business performance, as a result, undoubtedly came parallel with the bank’s best in class fixed income recommendations and platform enhancement. Worth highlighting, in 2019, HSBC’s fixed income business recorded a 30% growth in net AUM, and primary turnover for single line item products grew by a significant 181%.

HSBC Private Banking is Asian Private Banker’s Best Private Banker – Fixed Income Advisory.