Building long-term portfolio thinking through thought leadership
Bank of Singapore focuses on disciplined investment approach to deliver client outcomes
IN A world marked by shifting dynamics and increasing disruptions, making informed investment decisions require long-term and diversified perspectives more than ever.
This is why Bank of Singapore has taken the lead to establish a thought leadership offering among regional private banks, featuring an independent investment advisory council (the CIO Global Advisory Council or GAC) that was launched in May 2024.
To be refreshed yearly, the council comprises thought leaders from think tanks to asset management firms, with roles ranging from economists to strategists, who offer varied global and regional perspectives.
“There is no monopoly on good ideas,” noted Bank of Singapore’s global chief investment officer, Jean Chia. Their insights not only challenge and sharpen the private bank’s investment thinking but also enrich the firm’s viewpoints.
Earlier this year, Bank of Singapore’s Chief Investment Office (CIO), with inputs from the GAC members, launched the 2025 Supertrends report.
The report delves into the future implications of significant shifts in geopolitics and macroeconomic policies, offering insights into structural trends across technology and the environmental and social dilemmas of a new era.
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The five Supertrends identified by Bank of Singapore are:
- The changing world order with geopolitics reshaping global trade flows and multilateral arrangements that challenge the hegemony of incumbent superpowers;
- Activating asset allocation in the face of uncertainty and rethinking the asset allocation framework;
- Finding Artificial Intelligence #IRL (in real life) as AI become ubiquitous;
- Powering ahead with the global energy transition and AI infrastructure;
- Changing demographics across developed and emerging countries presenting macroeconomic and microeconomic challenges and opportunities.
Stress testing portfolios amid market noise
In the current economic landscape, stress testing portfolios against significant market shocks while adopting a long-term perspective has become essential.
“Rather than take a very short term approach based on market moves, it’s important to plant those seeds and plan for long-term growth in one’s portfolio, because there will be more and more idiosyncratic outcomes,” noted Chia.
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She added that Bank of Singapore adopts a structured investment approach, prioritising an analysis of the structural trends influencing financial markets and business models, rather than merely reacting to individual events. This structured research-based approach involves making optimised asset allocation decisions grounded in rigorous investment research and risk assessment.
To tackle two issues investors face today – recency bias and concentration bias – where investors either make swift decisions without long-term objectives in mind or become overly complacent and over-exposed in certain sectors without adequate hedging, the team implements checks and balances in the portfolio management process through a disciplined investment approach.
“By establishing goals and parameters for exposures, concentration limits and desired diversification within a portfolio, we build greater resilience that can withstand cycles. We stress test these portfolios against historical scenarios, a fundamental mindset for us,” said Chia.
In 2024, Bank of Singapore launched a new investor’s playbook as part of its CIO 2.0 strategy. Named MARQUEE, the framework describes its holistic approach towards investment. The components of MARQUEE include:
M - Macroeconomic framework for determining insights on global growth, inflation, interest rates, return expectations and risk factors.
A - Asset allocation models derived from rigorous analysis of risk and investment factors. Robust portfolio optimisation is applied to single-asset and multi-asset portfolios to achieve long-term risk-adjusted investment performance.
R - Research-driven approach for investment strategy, selection of equities, fixed income and alternatives, based on in-house analyst coverage and reputable external research partners.
Q - Seeking quality investments through qualitative and quantitative analysis. In essence, exposure to enduring business models that are resilient in the midst of rapid change.
U - Understanding and managing risks as a crucial component of portfolio management through investment compliance, identification and management of portfolio risks and stress tests.
E - Evolving ‘supertrends’ which are structural drivers for financial markets and business models in the medium term. Investments can be future-proofed through exposure to such structural trends.
E - Environmental, social and governance factors feature strongly in our investment decisions, including research of investee companies, identification of climate risks and exposure to potential beneficiaries of the energy transition.
People, Platform and Process
Chia noted that the bank has launched several initiatives regarding People, Platform and Process – three key elements that influence client outcomes.
On the People front, other than establishing a new investment advisory council, the bank is actively cultivating a talent pool through in-house development of investment experts and external recruitment. Notably, in June 2024, the bank welcomed Dr Owi S. Ruivivar as chief portfolio strategist, a seasoned investment manager with over 30 years of expertise in economics, investment strategy and portfolio management.
On the Platform side, Bank of Singapore has integrated BlackRock’s Aladdin platform, a market leading wealth management technology solution, into its risk analytics and investment processes for its discretionary portfolio managers and advisory portfolio managers. It is among the first private banks in Asia to adopt this platform for private banking clients.
To navigate increasing uncertainties in the current economic landscape, the private bank will introduce a new asset allocation framework around mid-2025, added Chia. With the new framework, clients can expect a risk-based approach to portfolio management.
Chia also noted that like winning sports teams, the Chief Investment Office (CIO) constantly iterates its investment process to stretch the best of its experienced investment professionals across their domains of equities, fixed income, funds, and skillsets of research, data analytics, asset allocation, portfolio management and risk management to collaborate closely together for superior investment outcomes.
Spearheading its thought leadership effort, Bank of Singapore held its inaugural CIO Summit in Singapore in 2024, with about 600 attendees, followed by another in Dubai this February with about 300 attendees.
“Bank of Singapore’s CIO Summit stands out from the usual outlook events. We convene thought leaders to discuss long-term trends, which may not yield immediate trading opportunities but offer crucial insights for clients to consider in their strategic longer-term portfolio decisions,” highlighted Chia, adding that this year’s CIO Summit will be held in July.
Distinguishing itself in Asia
Aiming to establish itself as a global private bank with its headquarters in Asia, Bank of Singapore operates from three main hubs – Singapore, Hong Kong and Dubai.
Chia noted that the bank’s unique position enables it to offer a distinct perspective as an Asian wealth manager, especially given that many of its clients are experiencing their second or third generational wealth transfer, unlike the more mature wealth seen in Western countries.
“Given our unique position as an Asian private bank with global operations, we are able to provide clients with both regional and global insights to build portfolios for lasting outcomes,” said Chia.
“We are not just an open-architecture platform for best-in-class investment products but a venue for prescient insights that give our clients an edge in terms of the breadth and depth required for managing their longer-term portfolios. The CIO team is deepening our domain expertise in artificial intelligence, alternatives, data analytics, asset allocation and sustainable investing to augment our expertise in multi-asset research and portfolio management across Asia in both emerging and developed markets.”
In collaboration with its parent company, OCBC, Bank of Singapore also places an emphasis on sustainable investing, conducting extensive research from both risk-management and return-driver perspectives.
At the group level, OCBC reported a 14 per cent increase in assets under management (AUM) within its wealth management segment, which includes Bank of Singapore and its premier banking functions, reaching a new high of S$299 billion in 2024. The growth was driven by net new money inflows and positive market valuation.
“Ingenuity of the human mind, innovative use of technology and the experience of a winning investment team will help us ride the wave of growth in wealth in Asia and beyond,” said Chia.
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