The World According to Chia: How Bank of Singapore’s CIO is Helping Build a Investment Platform for the Future
Jean Chia is CIO and Head of Portfolio Management and Research at Bank of Singapore and, in this leadership role, has both a bird’s eye view of the market’s evolution and a strategic vision of how the bank is positioned for the future. Her mandate at the bank is particularly wide-ranging, covering macro research, investment strategy, equities, fixed income, FX, as well as discretionary and advisory portfolio management and funds selection. Right now, she sees the investment world at an inflection point, driven not only by fears of inflation and the pace of monetary tightening, but also the geopolitical, socioeconomic impact arising from the Russia-Ukraine crisis and developments in China. Most of all, we confront the existential climate crisis. This all reinforces her belief in a greater portfolio diversification across asset classes, geographies and sources of return including alternatives. She is also an ardent believer in diversity of cultures, talent and experience, which is manifested in the teams she has assembled. Throughout the discussion, Jean’s deep thinking and her evident empathy with clients and colleagues shone through. Little surprise then that ever since her University of Oxford days, she has been an avid reader, and since lockdown a keen participant in a book club she and her team formed, not just to help them through uncertain times, but to exchange ideas with open hearts and minds.
Jean opens with her core concerns over the impact of inflation and potential slowdown in global growth. “Everyone expected the world to bounce back as the pandemic abates, but with the escalation of the Russia-Ukraine crisis, the really bearish scenario looms for the world’s economies and financial markets,” she cautions. “As these and other concerns play out – and nobody can predict what will happen – we need to guide investors back to first principles in terms of managing portfolios, recalibrating the risks, and looking longer-term at returns over multi-year cycles.”
Uncertainty and opportunity often go hand-in-hand
Jean observes that troubled times create opportunities as well, for example, the energy sector is on the rise as prices jump, and there will likely be areas of distress ahead that will put the spotlight on quality assets at discount prices. “We do not think investors should sit on too much idle cash amid an inflationary environment that will erode its value, but keep ample liquidity to take advantage of buying opportunities,” she recommends.
She steps back from the immediate vicissitudes of the world and the markets to look at the longer-term trends in wealth management and how the bank is positioning itself in terms of its investment platform.
“We cannot be all things to everyone,” she says.
“Instead, we believe in playing to our strengths, where we can pitch ourselves as world-class while tapping into best-in-class products and solutions from our partners in areas where we potentially have gaps,” she reports. “Bank of Singapore is developing the right internal capabilities as well as a strong partnership ecosystem that covers research, portfolio management services, funds and alternatives, in order to deliver wealth management solutions for our clients.”
Partnerships for the future
On the research side, she reports, for example, that for Hong Kong and China, the bank has partnered with Haitong Securities for Hong Kong and China equity research.
“This is best in class and the right type of scalable model for us, as Haitong’s research is high quality, and their coverage is deep, with a strong body of onshore analysts in China,” she says. “To achieve wider and high-quality coverage elsewhere, we are collaborating more with the broader ecosystem of buy-side, sell-side, consultants and other partners. That allows us to scale at an economically sound entry point.”
“In Singapore, the research team has developed from a position of strength in Singapore equity research to global sector views that also incorporates environmental, social and governance (ESG) factors in their analysis. For example, our real estate analyst Andy Wong who is a real primary research expert on Singapore property and REITs, is also able to take a global perspective on the real estate sector by leveraging research input from our research partners like Morningstar, Haitong and MSCI ESG research.”
The ESG wave
She notes that while the bank had long been a specialist in emerging markets credit research and investment, it is working to champion the evolution of ESG investing amongst clients in the region. “Our analysts can increasingly use ESG factors to identify alpha generating opportunities, avoid risks and also find value and stability from within the fixed income sector,” she says. “For many more of our clients, especially the younger generation, investment decisions will factor in ESG analysis and metrics going forward.”
She reports that the bank has published extensively on ESG topics for the past two to three years, and that this links directly to the investment propositions the bank offers.
“We provide the investment strategy for clients to help them understand where ESG impacts their investment portfolios, and also how ESG impacts the world at large,” she elucidates. “In this way, we underscore the concept that ESG factors are as important as macro factors, valuations, company dynamics, industry dynamics, and so forth. in the decision-making process on investments and will become more so in the future.”
Since 2020, the bank has partnered MSCI ESG research to complement their own research capabilities. “Each company research report we deliver has a relevant MSCI ESG rating, and each of our analysts factor in ESG considerations and articulate this with commentary in their reports on the key ESG considerations,” she says.
Additionally, the funds on Bank of Singapore’s master list are also calibrated according to the bank’s own ESG quotient, either “Emerald, Sage or Garden Green”, to guide clients on the level of ESG integration by third party fund managers.
Setting the ESG compass at Bank of Singapore
“In short,” she says, “we see ourselves as stewards of this journey towards ESG, but we also acknowledge that the journey has only really just begun. There are many elements that will gradually improve, including the core data availability, regulatory guidance and so forth. We have also launched a global ESG equity mandate within our DPM shelf, and we will increasingly curate ESG-centric opportunities within the private assets space as well as the alternatives space. But we need to do a lot of work to identify the best-in-class funds, managers and opportunities.”
She shifts her focus to the bank’s DPM franchise, noting that this manifests itself in a few key areas. The experienced BoS portfolio management team has managed a wide range of DPM mandates for Bank of Singapore’s clients across multi-asset strategies for over a decade. In addition, the bank also acts as sub-manager for sister company, Lion Global Investors, as well as for the bank’s own fund family, BoS International Funds (BOSIF), a SICAV-registered set of sub funds (including sleeves that feature Equities, EM high yield and investment grade bonds) that she explains are essentially modular building blocks for the DPM offering, and offered as funds for Bank of Singapore and OCBC clients.
DPM and best-of-breed curation
Cascading from the Bank’s own strategic asset allocation and tactical asset allocation, she adds that the DPM investment process incorporates a research-based security selection process for stocks, bonds, as well as allocation to its own building blocks and a well-curated selection of third party funds.
“We drive towards best-of-breed solutions throughout, within both the DPM and advisory mandates we run,” she states. “To achieve that we need to take a wide-angle view to assemble the optimal solutions for clients.”
The advisory mandate business she refers goes under the acronym ‘APM’, which stands for Advisory Portfolio Management. “In building the proposition,” she reports, “careful attention has been paid to align the bank’s investment objectives with our clients, making sure that clients access our specialist portfolio management prowess, as well as the capabilities of the larger research and investment teams.”
Building from a strong base
For both the DPM and APM offering, the bank believes in building beyond its strong history of expertise in EM fixed income and Asian equities. Our very robust long-term track record in DPM sets us in a position to strengthen the mandate offering to include new strategies and enhance the investment process further by incorporating the use of portfolio analytics and alternatives.
Her comment was a springboard to illustrate that the bank is evolving its offerings all the time to increase the addressable target clients for Bank of Singapore. Starting in 2016, the bank collaborated with Blackrock to launch a factor-based “Market Essentials Mandate” investing in ETFs.
“We expanded the shelf further to ensure that discretionary portfolios tap into innovation, ESG themes and quantitative research opportunities,” she explains. “In this regard, we launched a portfolio that allocates to thematic ETFs based on CIO investment themes. This model also allowed us to lower the entry point to our DPM offering, bringing in new and younger clients, for example, and thereby driving DPM penetration at BoS.”
Innovating and diversifying
She expands on this, explaining that the bank is exploring strategic partnerships to introduce new styles of DPM, helping the bank build on traditional strengths by leveraging different approaches and innovations.
“We want to keep evolving our mandate offering,” she says, “and we certainly aim to include more private and alternative assets. Looking longer-term, more of the returns will be derived from non-traditional sources, in addition to mainstream public markets.”
And that leads Jean to comment on scalability, noting that organic growth needs to reach a point of what she calls ‘escape velocity’. “The only way we can achieve that is to scale platforms such as through our BoS International Fund (BOSIF) platform created several years ago, while retaining our core style and approach throughout,” she explains. “Meanwhile, for the UHNW and global family office clients and our larger DPM mandates, we offer customised mandates, delivering bespoke solutions tailored to clients’ specific needs and requests.”
She says the bank is also working to put in place platforms to enable them to provide deeper analytics and disclosures, including climate-related information.
Jean has a clear vision of the key objectives ahead. Her first mission is for more clients to build resilient, long-term portfolios that deliver risk-adjusted returns through the bank’s DPM and APM offerings, and secondly to embed sustainability into the overall research, advisory and investment processes of the bank. Last but not least, she aims to build a highly-skilled investment team with best-in-class talent, expanding the quest with a wider angle of vision than ever before.
“Wealth management has matured, and at Bank of Singapore we can now attract institutional talent beyond wealth management, from buy-side, asset owners, investment banks and consulting backgrounds,” she reports. “In doing so, we acknowledge that wealth management is now a far more professional endeavour, a far more institutional-level offering.”
Jean Chia is Singaporean born and bred, and after junior college at home, studied Philosophy, Politics and Economics at University of Oxford.
She summarises her career as a story with three chapters. The first chapter was as a financial journalist for The Straits Times in Singapore, under a company scholarship. The second chapter saw her move into asset management, working for Dresdner RCM, which then became part of Allianz Global Investors. She headed a team called Grassroots Research, which covered buy-side investment research.
“Those were exciting times, back in the late 1990s working at a US investment manager in growth stocks was a great opportunity for me,” she recalls. “You can imagine that technology was attracting a lot of money and trading at extreme valuations,” she recalls. “That boom-and-bust phase taught me a lot about identifying opportunities, but also about risks and the dangers of extreme momentum.”
The third chapter saw her move into wealth management, first with UBS Wealth Management, and then with Bank of Singapore.
“I feel like the past 15 years in wealth management have been the most rewarding and connect to the first two chapters of my career,” she says. “Today, I am aligned as my current role brings together a unique set of experiences that inform the way I see the world. This certainly helps me in the way I develop the business here. In today’s world, we need multi-faceted views and open minds.”
She says her background has also helped her assemble a team with considerable diversity of nationalities and skills.
“We have individuals from every continent - Asia, Europe, UK, the Americas and Africa - represented in our talent pool,” she reports. “They all bring different perspectives and talents. Every time we discuss anything, from macro issues to the Russia-Ukraine conflict or perhaps China and real estate, we often have very intense discussions. These help us arrive at what I think are well-rounded, informed decisions. We also acknowledge it when we got things wrong, and learn from those moments.”
Jean is married, with an 18-year old daughter who is soon to enter university. Spare time might see her at a book club that she and team members started during the pandemic called ‘Bookends & Blurbs’.
“Since early in lockdown we have had a monthly virtual meeting over drinks and a discussion on a book that in turns we select and critique, and that has been a lot of fun,” she explains. “It might be very old school to read a book and discuss your views openly, but it is remarkably rewarding, and it helped us all through those times, and helped us to bond as a team.”
She also enjoys long walks exploring Singapore with her family and friends, often rediscovering long-forgotten nooks and crannies of the island. “Treasuring our friendships in the place we grew up is really important, and this has helped us all through these times,” she says. “The pandemic offered us the downtime from travel and racing around to reconnect with these vital elements of our lives.”
Another important facet to her life is giving back. She is a member of the Financial Women's Association, and enjoys mentoring young people within her own organisation and beyond. “I try to build their confidence and enthusiasm, by listening and offering perspectives from our viewpoint on the industry as those who have walked the path before,” she reports.
She closes the conversation by remarking that one of her favourites from the book club sessions was Satya Nadella’s Hit Refresh, which chronicles the Microsoft CEO’s journey to transform corporate culture as the firm moves from being a legacy business to embrace innovation and new engines of growth. “Here’s a company that went back to the first principles to fix their DNA and returned to a people-driven model for innovation. It resonated with me, as I strongly believe in leadership by role modelling, developing talent, in embracing diversity and true teamwork,” she says.
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