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  • 07/05/2016

How nothing precious escapes the eyes of Bin Shi and his Greater China team at UBS.


Picking Future Leaders in China Opportunity

By Mike McNaught-Davis

Best-in-Class Manager of the Year Bin Shi, Lead Portfolio Manager at UBS Asset Management, tells us how he drives the success of the Greater China Equity category and inspires his investment team.

BM: What is the key to your success?

BS: I think that there are several key factors. Not only do we want to beat the benchmark, but we also aim to identify leading companies before they are widely recognized by others. If this means investing in firms that are outside the benchmark, then we are happy to do so. If we have high conviction in an off-benchmark firm, then we will take a significant position in it. This is particularly the case for the areas of the market that will benefit from China’s structural reforms and growth over the longer term. These are the so-called ‘new economy’ sectors, such as consumer discretionary, healthcare and IT. My team strives to identify industry leader or future leaders at an early stage, so that investors can enjoy a longer period of growth and higher return.

Furthermore, if we like a company, we are prepared to stand by it over the long-term. In the past five years, our average annual portfolio turnover ratio is around 25%, which means that, on average, we hold stocks for four years – a much longer investment horizon than many of our peers.

From a team perspective, the most important thing is to identify candidates who share our investment philosophy. This allows us to have a cohesive team. Essentially, everybody is on the same page regarding their investment approach, and we are all heading towards the same direction.

BM: What do you consider when constructing a portfolio?

BS: Flexibility is necessary. As I mentioned, we are unconstrained by the benchmark which allows us to explore a broad range of potential investment opportunities. So we look closely at the health of China’s macro economy and study industry dynamics, which helps us to spot underrepresented sectors in the MSCI China Index. Within these sectors, the team looks at a company’s competitiveness, profitability and sustainability and corporate governance.

BM: How would you describe your stock selection approach?

BS: The team focuses on fundamental research, using our in-house research, and constructs a diversified portfolio from the bottom up that contains between 40 to 70 holdings. There are no risk constraints around either sector exposure or individual positions, and active share has been consistently around 70% during the past few years. Faithful to the investment team’s buy-and-hold philosophy, our average annual portfolio turnover rate for the past five years has been around 25%.

As stock selection is the key source of added-value in our portfolio, it is, therefore, the primary contributor to portfolio outperformance. Indeed, our stock selection often leads to significant active sector positions; however, this is purely an outcome of our bottom-up approach.

BM: What about your investment disciplines?

BS: We are disciplined investors, so once a stock is identified for inclusion in the portfolio, the implementation can be quite fast. For new holdings, we will typically build an initial position of approximately 1%. However, if our conviction in a stock grows or if its valuation becomes more attractive, we will increase our exposure. On the contrary, if a stock becomes less attractive or our confidence level falls, we will immediately trim our weighting. This assertive style has certainly helped UBS to deliver outstanding returns for its investors even during the most volatile period for China equities.

I should also point out that when building or reducing a stock position, our Portfolio Managers (PMs) work in close collaboration with the analysts and traders in executing the trade. The PMs also review portfolio positions frequently.

BM: What is your team’s investment experience?

BS: Our UBS China Opportunity Equity Fund is managed by six dedicated Chinese equity specialists, based in Hong Kong, along with seven Emerging Asian sector analysts spread out across the region. The combined team has an enviable track record of managing Chinese investments that goes back almost 20 years.

BM: Do you incorporate ESG when selecting stocks in the portfolio?

BS: It is our belief that Environmental, Social and Governance (ESG) factors are best assessed as part of our overall research process, and are viewed as an integral component of the due diligence process. Taking ESG factors into consideration when making investment decision also allows us to have a broader and more complete view of a company and the dynamics of a sector. What’s more, ESG is an integral part of our internal conversation where we share, discuss and debates ideas to help us improve our overall knowledge.

BM: How is risk managed in the portfolio?

BS: Risk management is a core element of our investment process – from idea generation and stock selection through to the post-trade monitoring and portfolio review stage. Our team also has access to systems to support the risk management functions, including the internally developed proprietary Global Equity Risk System (GERS), and the widely used industry-standard BARRA model.

BM: How do you inspire your team for greater achievements?

BS: The market is superb at screening success and failure because the feedback is often immediate and easy to access. So we look at our performance numbers and identify the decisions that worked and examine where improvements can be made. This analysis is done as a single unit, and jointly we reach conclusions and find solutions. Importantly, we learn from our experiences and ultimately become better investors. It is this positive, supportive approach that our team members find most inspiring.

BM: What’s your personal motto for a rewarding working life?

BS: I think it would be “Unless we progress, we regress”. The most important thing in this industry is your attitude at work. It is not really about how smart you are or how experienced you are; I think the key thing is to work hard, think hard and not become complacent. The world changes, the market changes, so we constantly need to learn new things to stay ahead of the game.

BM: What advice do you offer new team members?

BS: I tell them that they need to have the desire to be the best. If you want to become a good investor, then your career is part of your life rather than something you do just to earn income. With this mentality, you will fully dedicate yourself to the work and won’t complain about the workload and trips to different places (sometimes it could be hard) to find out more information about the companies you invest. If you have that desire with a very clear objective, then you will become successful.

BM: What developments in China do you expect to see in the next few years?

BS: China is experiencing significant structural change. I expect GDP to slow, but the growth model is shifting too as the country moves from an export-led to a balanced and domestically-driven economy. As a result, private companies are going to play an increasingly important role.

That said we are positive on the market this year. Earnings for most Chinese companies will be quite robust because the economy is doing better than expected.

The good news is that we believe our China Opportunity Fund is positioned to benefit from these adjustments given its exposure to ‘new economy’ companies that have great potential to be leaders in their respective industries. BM

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挑選未來龍頭企業

Mike McNaught-Davis 撰文

瑞銀資產管理首席基金經理施斌贏得本屆「同級最佳—年度基金經理」大獎,他與我們分享在大中華區股票類別的致勝之道,以及他啟發投資團隊的方法。

指標:你成功的秘訣是甚麼?

施斌:我認為我們的成功有賴幾個主要因素。我們不僅要跑贏基準指數,我們更致力於領先發掘有潛力成為龍頭企業的公司,特別是在它們尚未廣為人知以前。就算符合此一條件的公司不在基準指數之內,我們亦樂意投資。若我們看好某間公司,就算它是非指數成分股,我們也會擁有相當大的持倉,尤其是屬於可長期受益於中國結構性改革及經濟增長的行業之公司。這些行業被稱為「新經濟」行業,包括非必需消費品、醫療保健和資訊科技等。我的團隊致力於發掘正處於發展初階的行業領先者,或可成為未來行業龍頭的公司,為投資者帶來更多的長線增長價值和更高回報。

此外,如果我們偏好一間公司,我們打算長期支持該公司的發展。我們過去五年投資組合的年化平均周轉率約為25%,即我們的平均持倉年期大概為4年,比許多同行的投資年期明顯較長。

在領導團隊方面,最重要的是選擇投資理念與我們相契合的團隊成員,才能團結一致。我們所有成員的投資方針相同,方向一致。

指標:在構建投資組合時,你還會考慮甚麼因素?

施斌:靈活性很重要。正如剛才提及,我們不侷限於基準指數,能夠廣泛探索潛在投資機會。因此,我們仔細研究中國宏觀經濟走勢,以及深究行業動態,發掘未被MSCI中國指數充分覆蓋的行業。在這些行業當中,團隊會檢視個別公司的競爭力、盈利能力、可持續性及企業管治。

指標:可否介紹你的選股方法?

施斌:我們重視基本面研究,善用公司內部研究資源,「由下而上」分析,構建包含40至70隻股票的多元化投資組合。我們對行業持倉及個股持倉均不設上限,過去數年,偏離基準的持倉權重一直處於約70%的水平。由於團隊緊守「買入並持有」的投資理念,過去五年投資組合的平均年化周轉率約為25%。

選股方法是為我們投資組合增值的關鍵來源,亦是組合回報跑贏同行的最大貢獻因素。事實上,我們的選股方法時常令組合的行業配置權重大幅偏離基準,純粹是「由下而上」選股的結果。

指標:選出股票後,你會遵循怎樣的投資紀律呢?

施斌:我們是富有紀律的投資者,一旦確立要將某股票納入投資組合,我們會快速執行該決定。新持股的最初權重通常約為1%,但若我們對該股票的信心增強,或其估值變得更吸引,我們將增持。相反,如果該股票的吸引力下降,或我們對其信心轉淡,我們會立即減持。此堅定的風格明顯有助瑞銀資產管理為投資者帶來出眾的回報,即使在中國股市最波動的時期。

值得一提的是,當增加或減少某一持倉權重時,我們的投資組合經理在執行買賣過程,會與分析師和交易員緊密合作。投資組合經理亦會經常檢討組合持倉。

指標:可否告訴我們團隊的投資經驗?

施斌:我們的瑞銀中國精選股票基金由六位於香港、專責中國股票分析師管理,另外,有七位分佈於區內的新興亞洲行業分析師亦參與管理。整個團隊在中國投資擁有近20年經驗,往績彪炳。

指標:在為投資組合選股時,團隊有否考慮ESG因素?

施斌:我們相信,將環境、社會和企業管治(ESG)因素視作整體研究過程的一部分,是對ESG因素的最佳評估方法,而ESG評估亦是我們盡職審查過程的重要一環。投資決策時考慮ESG因素,讓我們更全面及完整地了解公司和行業的發展。此外,ESG亦是我們內部討論的重要主題,我們會分享、討論和辯論有關想法,以提升團隊的全方位知識。

指標:你如何管理投資組合的風險?

施斌:風險管理是我們投資過程的核心要素:從概念構想及股票篩選,到交易後監控和投資組合檢討亦然。團隊亦有電腦系統輔助風險管理工作,包括內部開發的獨家環球股票風險系統(GERS)和行業廣泛採用的BARRA模型。

指標:你如何鼓勵你的團隊追求更大的成就?

施斌:市場是優勝弱汰的高效機制,因為成敗結果是即時反映。因此,我們會審視團隊投資的表現數據,識別有效的決策,及檢討可改進之處。團隊成員會團結一心,共商結論和尋找解決方案。而重要的是,我們會從經驗中學習,達致更出色的投資者。這種積極和互相支持,是我們團隊成員覺得最激勵人心的地方。

指標:你工作的座右銘是甚麼?

施斌:我的座右銘是「不進則退」,要在這個行業中成功,工作態度才是關鍵,而非才智與經驗。我認為最重要的是努力工作,用心思考,不要自滿。世界及市場變化萬千,所以我們須要不斷學習新事物,才能保持領先。

指標:你對新團隊成員有甚麼事業發展方面的忠告?

施斌:我告訴他們要有做到最好的渴望。若你想成為一個傑出的投資者,你的職業將成為你生活的一部分,而非僅以賺取收入為目的。有了這種心態,你將全心貫注工作,不會抱怨為了要更深入了解所投資公司而承受龐大工作量和要到不同地方出差(有時這會是苦差事)。若你有這樣的渴望,加上非常明確的目標,你便會成功。

指標:你預計中國經濟在未來數年將如何發展?

施斌:中國正經歷重大結構性變化,我預計中國經濟增長將放緩,但隨著內地的增長模式轉變,即從出口主導經濟轉向更平衡、由內需帶動的經濟,私營公司的角色將越來越重要。雖然如此,我們對今年的市況仍然樂觀,因為經濟表現好於預期,大部分內地企業的利潤將甚為穩健。我們相信中國精選股票基金的優良定位,可使其從經濟轉型中受惠,因為基金所投資的「新經濟」企業,具有龐大潛力成為各自行業的龍頭。 BM

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