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Navigating Markets With All-weather Solutions


NAVIGATING MARKETS WITH ALL-WEATHER SOLUTIONS

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Patrick Brenner
Head of Multi-Asset Investment, Asia
Schroders

Asmooth sea never made a skilled sailor.” The recent market correction may be a good reminder of the comeback of volatility and the importance of diversification. Schroders, the winner of this year’s Best Multi-Asset Investment House (Hong Kong), stresses downside risk management in navigating the elevated volatility in 2018. Patrick Brenner, Head of Multi-Asset Investment, Asia, shared with BENCHMARK how his firm helps deliver a smoother investment journey to clients over time.

BENCHMARK (BM): Congratulations on your achievements in Multi-Asset Strategies for consecutive years! What defines your investment philosophy and how do you create value for investors?
Patrick Brenner (PB): Thank you! Helping our clients achieve their financial goals has always been the focus when we design investment solutions. From strategies that aim to beat inflation to funds that focus on generating a diverse income stream, we deliver outcomes to suit a variety of investment needs.
It is also our philosophy to constantly challenge ourselves by looking for innovative ways to continuously enhance outcomes for investors. This ranges from evolving our research process as markets change, sharpening our tools for portfolio construction and improving the efficiency of idea implementation. All these are extremely important elements in delivering high quality investment solutions to our clients.
BM: Is your investment success attributable to your investment approach? In what ways are your strategies different from those of your peers?
PB: Yes, I believe that our forward-thinking and innovative approach is what has led us to be one of the first asset managers to introduce multi-asset solutions to the market. Our active asset allocation process is benchmark-unconstrained and focuses on the true return drivers behind asset classes, which differentiates ourselves from the more traditional, benchmark-constrained approach of asset allocation. In addition, the holistic view of risk management through assessing risks in multiple dimensions, as well as harnessing diversification across different asset classes, has helped our multi-asset solutions to achieve lower volatility and drawdowns. Ultimately, this improves our clients’ experience as they can enjoy investment outcomes, such as capital growth or income generation, with a smoother ride along the way.
BM: Looking ahead, what challenges will 2018 present and how do you overcome them by using active asset allocation? Can you tell us your latest portfolio positioning?
PB: I think the most difficult problem for multi-asset investors in 2018 is that valuations of both equities and bonds are expensive, and thus the diversification benefit of having exposure to both asset classes could become challenged, especially if an equity market correction is triggered by rising bond yields.
The equity market is also likely to see more volatility this year as central banks start to unwind their ultra-loose monetary policies. As such, a strong focus on downside risk management using tools like put options will become more important. These strategies help reduce the downside impact but allow participation when markets rise, thereby delivering strong risk-adjusted returns and income to our clients.
Across our multi-asset portfolios, we have maintained an overweight in equities as the cyclical environment and corporate fundamentals remain supportive, while we have also kept an underweight in duration assets given the potential of rising inflation and monetary tightening.
BM: We have noticed that ESG is an important consideration in your investments. Given the growing emphasis on ESG globally, have you observed a change of attitude among Asian companies and investors towards sustainable investing?
PB: You are right. Schroders has been incorporating ESG considerations into our fundamental research and security selection process for 20 years. We see ourselves as long-term stewards of our clients’ capital, and this philosophy naturally leads us to focus on the long-term prospects for companies in which we invest.
European investors have traditionally led the way in sustainable investing. However, there has been significant progress in Asia over recent years. Since 2014, stewardship codes and principles have been adopted in Japan, Malaysia, Hong Kong, Taiwan, Singapore, Korea and Thailand. In addition, the growing number of stock exchanges introducing sustainability reporting standards, as well as increasing scrutiny from investors, all combined to change companies’ attitudes towards ESG.
Among asset owners in Asia, there is also a growing commitment to integrate ESG considerations across their investments. In Schroders’ 2017 Global Investor Study, Asian investors stated that they had increased their sustainable investments over the past five years, and they believe sustainable investing will become more important in the coming years. With sustainability firmly in focus in the region, there is potential for Asia to leap ahead. BM

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運用全天候方案導航市場

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亞洲區多元化資產
投資主管Patrick Brenner
施羅德

平靜的海練不出優秀的水手」,近日的市場修正可能引證市場再現波幅及分散投資的重要性。本年度最佳多元資產投資公司大獎的得獎者施羅德,強調在2018 年投資波動性加劇的市場時,務必要留意下行風險管理。該行的亞洲區多元化資產投資主管Patrick Brenner,與《指標》分享他們如何為客戶提供平穩的投資旅程。

《指標》:恭喜您連續多年獲得多元資產策略的獎項!可否分享一下您的投資哲學?
Patrick Brenner(PB):多謝!於我們設計投資方案時,協助客戶達致他們的投資目標是我們的重點。無論是面對通脹,還是創造多元化收入來源的基金,我們會配合不同的投資需要為投資者帶來回報。
我們一向的哲學是不斷挑戰自已,並找尋創新的方法以持續為投資者帶來回報。這包括因應市場轉變而演變我們的研究過程,銳化我們建立投資組合的工具及改善執行投資理念的效率。以上種種均對提供高質投資方案予客戶來說非常重要。
《指標》: 您的成功能否歸功於您的投資方式?您所採用的策略與業界有甚麼不同之處?
PB:不錯,我們的前瞻思維及創新方向,引領我們成為市場上首批引入多元化資產投資的先驅。我們的主動式資產配置流程不受基準約束,主要集中於資產類別內能帶來回報的投資,這與傳統受基準約束的資產配置方式有所分別。此外,我們以多角度作出全面的風險管理,以及透過分散投資不同資產級別,協助我們的多元化資產方案實現較低的波幅。此模式有助提升客戶體驗,在爭取資本增值及收益的同時,維持減低波動性。
《指標》: 展望未來,2018 年會有甚麼挑戰及您會怎樣利用主動式資產配置來克服這些挑戰?可否闡明您最新的投資組合定位?
PB:我們相信多元化資產投資者面對最困難的問題是股票及債券的估值同樣高企,故此分散投資於兩項資產的優點會受到衝擊,尤其是上升的債券孳息會帶動股票市場的修正。
股票市場有很大機會於今年將會呈現更大波幅,因為各央行將收緊寬鬆的貨幣政策。因此,使用期權等工具作下行風險管理會變得更重要。此等策略協助減低下行影響,而市場上升時也可分一杯羹,能為客戶帶來理想的風險調整回報及收益。
鑑於週期性環境和企業的基本面依然樂觀,我們多元化資產投資組合中股票的比例較高。由於通脹可能上升及貨幣政策的收緊,我們保持較低的存續期。
《指標》: 我們注意到環境、社會及管冶(Environmental, Social and Corporate Governance, 簡稱「ESG」)於您的投資中屬重要的考慮因素。鑑於全球日益重視ESG,您有否察覺到亞洲企業及投資者對可持續投資改變了態度?
PB:對,施羅德在過去20年竭力將ESG元素容入我們的基本研究及揀選證券過程。我們作為客戶資金的長遠守護者,此策略使我們更著眼所投資公司的長遠前景。
傳統上,歐洲投資者於可持續投資方面具領導地位。但亞洲近年也有顯著的進步。從2014 年開始,日本、馬來西亞、香港、台灣、新加坡、韓國及泰國也套用了當中的管理守則和原則。此外,股票交易所引用可持續報告及越來越多投資者對此進行審查,也促成了企業對ESG態度的轉變。
現在很多亞洲的投資者將ESG因素整合到其投資當中。施羅德的2017年環球投資者研究指出,亞洲投資者表示於過去五年增加了可持續投資。他們相信,可持續投資於未來會更舉足輕重。隨著可持續投資成為區內焦點,亞洲將更有潛力向前邁進。 BM

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