The Asset Triple A Investor, Fund Management and Insurance Awards 2019
Who are the best investors, asset managers, and insurers in Asia-Pacific?
In a year when all asset classes performed at their worst level in 10 years, investors, asset managers, and insurers who were able to defend their portfolios against the market onslaught did relatively better than their peers.
Plagued by a flood of challenges including market volatility, the US-China trade war, monetary tightening, and credit risks in emerging economies, global stocks fell by 12% in the fourth quarter of 2018 alone, completely erasing the 6.1% gain in the first three quarters, according to the MSCI World Index. Emerging market stocks also suffered badly due in part to a stronger US dollar.
The good news is that interest in environmental, social, and governance (ESG) investing has been picking up despite the poor performance of almost all sectors of the financial and commodity markets. To recognize firms that have embraced ESG factors, The Asset is proud to announce the inaugural winners of the ESG investment awards in this year’s The Asset Triple A Investor, Fund Management and Insurance Awards 2019.
As the importance of the China market continues to increase regionally and globally, The Asset highlights its different subsectors, while recognizing the top firms onshore and offshore.
Given the challenging investment conditions, evaluating the winners was about selecting investors, fund managers, and insurers who were alert and flexible in repositioning their portfolios in a timely manner.
Among asset management companies, those who were more diversified in terms of asset allocation, particularly multi-asset and mixed asset managers, performed better than their single asset and single strategy peers.
A combination of innovative products and a high level of client service were also key drivers to better performance.
Pension fund investors also diversified from their traditional portfolios into alternative asset classes such as real estate and infrastructure. In this connection, they also reorganized their investment teams to make them more structurally suitable for alternative investing.
Real estate investors also diversified their portfolios geographically by expanding their investment universe to other markets, particularly Singapore, Hong Kong, Sydney, Melbourne, Brisbane, Perth, Beijing and Shanghai, and the US.
In terms of ESG investing, asset owners used exclusions as part of their investment strategy.
The biggest development in 2018 was AIA, one of the biggest insurers in Asia, excluding tobacco manufacturers from its investment portfolio by divesting US$500 million worth of equities and bonds.
Other asset owners also continued to seek out investment opportunities that will enable their firm to better achieve its goals while strengthening the three key elements of portfolios - defensive sleeve, exposure to idiosyncratic return drivers and the use of alpha generative external managers.
With higher volatility and stretched valuation in the public markets, asset owners have also diversified their portfolios by expanding to private assets as well as assets that offer lower volatility and assets that act as a hedge against inflation.