The Age of The Trusted Advisor Over the next few issues of BENCHMARK, we will be featuring the key Awards competitions that are an annual feature of our publishing and events calendar. It is a time of year to reflect on what has happened in our industry and out in the big wide world. Having the chance to celebrate the good things and to highlight outstanding performance is one of the most satisfying aspects of our work at WealthAsia Media. We are gratified that so many of you are able to share these moments with us. This month our focus has been on the BENCHMARK Wealth Management Awards for 2014, the celebration dinner for which was held on November 12th at the Conrad Hotel. It was a great industry gathering and a lot of fun was had. See for yourself - In this edition we celebrate the individual Advisors who were successful in this year’s competition. See them taking part in the competition and then, the best bit, celebrating at the Wealth Management Awards dinner. In the next edition of BENCHMARK we will focus on the companies who were voted THE BEST IN CLASS for 2014. Thank you again to our sponsors, all the participants and of course the winners in the Advisors to Trust Competition. Turn to page 40 for full details. As we celebrate the 5th anniversary of the Wealth Management Awards and Advisor of the Year Awards, and the 11th year of our Fund of the Year Awards, we are humbled by the trust that you have placed in our hands. Our Awards are not easy to win, or easy to judge for that matter. So we are extremely thankful for the time and commitment given by our judging panel, and for the effort made behind the scenes at the companies who participate. While we at WealthAsia Media cannot hope to change the world, and what we do is only a drop in the ocean, I wish to thank you for your support of us in choosing a tougher path. Elsa Pau Publisher and Editor-in-Chief XXXXxxxxxxxxxx 在接下來的幾期,《指標》將會刊載主要獎項的年度頒獎典禮資訊,這些比賽都是我們所關 注的。一年很快又過去了,現在是時候回想今年在我們的行業,以至環球社會所發生的事 情。我們在 WealthAsia Media 工作,感到最自豪、最滿足的地方就是能夠有機會去慶祝美好 的事物,表揚出色的表現。我們很高興能夠與你分享這些動人時刻。 我們本月的焦點落在指標 2014 財富管理大獎。頒獎典禮及晚宴在 11 月 12 日於香港港麗酒 店(Conrad Hotel)舉行。這是一場盛大的行業聚會,繽紛節目精彩不斷。在本期,我們將介 紹在今年比賽中成功取得殊榮的獨立理財顧問。你可以細閱他們的參賽過程,並分享他們 在財富管理大獎晚宴中慶祝的喜悅。 我們在下一期的《指標》將聚焦於獲得 BEST IN CLASS 獎項的機構。我們再一次感謝我們的贊 助商、所有參賽團體,當然還有 Advisors to Trust 比賽的得獎者。請翻到 40 頁細閱詳情。 今年是我們第 5 年慶祝財富管理大獎及理財顧問年獎,也是第 11 年慶祝年度基金獎項。我 們十分榮幸能夠得到衆多行內人士的信任。我們的獎項並不容易贏取,決定比賽中的勝出 者也不是一件容易的事,因此我們非常感激我們評審團付出的時間和努力,以及參賽機構 在幕後的付出。雖然我們在 WealthAsia Media 的工作並不能改變世界,而我們所做的也只是 滄海一粟,我還是衷心感謝你們的支持,讓我們在這條難走的道路上勇往直前。 www.FundAsia.net 1 Publisher's NOTE
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
The Age of The Trusted Advisorover the next few issues of BEnCHMARK, we will be featuring the key Awards competitions that are an annual feature of our publishing and events calendar. It is a time of year to reflect on what has happened in our industry and out in the big wide world. Having the chance to celebrate the good things and to highlight outstanding performance is one of the most satisfying aspects of our work at WealthAsia Media. We are gratified that so many of you are able to share these moments with us.
this month our focus has been on the BEnCHMARK Wealth Management Awards for 2014, the celebration dinner for which was held on november 12th at the Conrad Hotel. It was a great industry gathering and a lot of fun was had. see for yourself - In this edition we celebrate the individual Advisors who were successful in this year’s competition. see them taking part in the competition and then, the best bit, celebrating at the Wealth Management Awards dinner.
In the next edition of BEnCHMARK we will focus on the companies who were voted tHE BEst In CLAss for 2014. thank you again to our sponsors, all the participants and of course the winners in the Advisors to trust Competition. turn to page 40 for full details.
As we celebrate the 5th anniversary of the Wealth Management Awards and Advisor of the Year Awards, and the 11th year of our Fund of the Year Awards, we are humbled by the trust that you have placed in our hands. our Awards are not easy to win, or easy to judge for that matter. so we are extremely thankful for the time and commitment given by our judging panel, and for the effort made behind the scenes at the companies who participate. While we at WealthAsia Media cannot hope to change the world, and what we do is only a drop in the ocean, I wish to thank you for your support of us in choosing a tougher path.
Advisors To Trust xxxxxxx40 special Report – Advisors to trust 特別報告—理財顧問年獎
the annual BEnCHMARK Advisor of the Year Awards has become an industry standard for financial practitioners who strive for best practice. We present profiles of the winners, who were presented with their trophies at this month’s BEnCHMARK Wealth Management Awards dinner.《指標》的理財顧問年獎已成為金融從業員追求最佳實踐的行業指標。比賽採用以客為本的準
則,評核參賽者的操作實踐和態度是否符合客戶利益。
Financial Planning 財務計劃23 Managing Income When Rates Are Low 構建投資組合 — 設定您的投資目標
the need to generate regular income on your investments is of particular concern to those at or near retirement. But every investor should understand how bonds and interest-paying capital notes can work for them within a diversified portfolio, writes Richard newell將近或已經退休的人一般會特別關注能否從投資中賺取定期收入。所有投資者均需要理解
債券和付息資本票據如何從多元化投資組合中為這類人士達成目標。編者:Richard newell。
Legal Briefing xxxxxx25 the theft of Art 藝術品盜竊
While art trafficking is not a new phenomenon in western jurisdictions, there has been a lot more interest surrounding the theft of Chinese art from European museums in recent years. Yet not much has been said about how art is being sought out and focussed on in China by criminals and forgers. Richard norridge provides the background.藝術品走私販賣在西方國家早已屢見不鮮,而近年來歐洲博物館的中國藝術品盜竊事件
引起了大眾更多的關注。然而,坊間並無太多罪犯和贗造者如何選出及注意到這些中國
藝術品的相關資料。Richard norridge在此為你提供背景資料。
Family Offices 家族辦工室28 setting Up A Family Education Program 發展家族教育計劃
Christian stewart explains how family offices that have as their mission the preservation of family wealth, in all of its forms, must also address the topic of family member education. 所有的家族辦公室都有同樣的任務,那就是保存家族財產。所以Christian stewart認為不論採用任何方式,它們都要面對家庭成員的教育問題。
BENCHMARK Conversation 《指標》對話
31 Meet the Manager 與基金經理對話Attendees at WealthAsia’s event ‘the sustainable Family office Forum’ were given a rare opportunity to listen to the personal observations of local fund manager Martin Lau. He is the subject of this month’s Meet the Manager interview.WealthAsia活動「可持續發展家族辦公室論壇」的出席者得到千載難逢的機會,聽取本地基金經理Martin Lau的個人見解。他是本月「與基金經理對話」訪問的受訪者。
40
23
206%
28
MetLifeAD
BENCHMARK Conversation 《指標》對話
38 Investing in Hong Kong’s Vibrant Restaurant scene 高級餐飲業的風險和回報
Addressing environmental, social and governance concerns in the context of emerging countries, is a big problem for investors. Martina MacPherson explains the background.兩位香港高級餐飲文化的行業領導者,親身經營自己的餐廳及個人品牌。他們與本刊分享如
何在全球競爭最激烈的市場中,成功投資及經營高級餐廳。
Personal Investing 個人投資06 the Global Portfolio 環球投資組合
As uncertainty increases in regional and world markets, it is important for investors to keep abreast of the implications for their portfolios. this regular feature in BEnCHMARK provides a snapshot of recent market developments and highlights areas of threat and opportunity for investors. 本期《指標》的環球投資組合將會向投資者展示最近的市場發展概況,並重點指出當中的危
與機。
12 the Editors’ Choice – Global Fixed Income Funds 編者之選 — xxxxxxx
We have another new section which uses our own methodology to assess those funds likely to produce consistent long term returns. Each month we will focus on a different sector. this month it is Global Fixed Income我們在這個新章節採用獨有方法,分析有潛力產生長期穩定回報的基金。我們在每一個
月都會挑選一個地區進行分析。今期是全球固定收益基金。
20 Maximising Your MPF Benefits 把強積金的得益最大化How can my MPF be a benefit when it seems like a tax on earnings?” stewart Aldcroft explains how, over time, the benefits will show themselves clearly.「強積金 (MPF)就像從我的收入徵稅一樣,怎會令我有所得益呢?」stewart Aldcroft為你明確解釋這些利益會如何隨著時間過去展現眼前。
Responsible Investment xxxxx38 EsG challenges in Emerging Markets 新興市場在環境、社會和管理上遇到的挑戰
Addressing environmental, social and governance concerns in the context of emerging countries, is a big problem for investors. Martina MacPherson explains the background.對投資者來說,在新興市場探討有關環境、社會和管理上的問題,絕對是一個難題。Martina
MacPherson將會跟我們解釋一下其背景。
Top Performing Funds 最佳表現基金90 Check the performance of your HK funds using the latest data from Morningstar
用晨星的最新數據,查看您所選的香港基金表現如何。
38
06
31
ContEnts錄目
ICBC(Asia)AD
ContributorsChristian Stewart
Christian stewart founded Family Legacy Asia in July 2008 to help Asian families preserve their family wealth for generations, by providing them with independent and objective advice on effective family governance. An Australian solicitor by background, and a former tax partner at PWC in Hong Kong, he also spent 6 years as head of the Wealth Advisory team in Asia for JPMorgan Private Bank.
Martina MacPherson
Martina is Managing Partner at sustainable Investment Partners, a UK-based consultancy specialising in business strategy, intermediary business development and multi-lingual content marketing services within the areas of sustainable investments, CsR, technology, lifestyle and education. Martina was formerly Vice President, Head of EsG Commercial Relationships and Marketing with MsCI and Associate Director, strategic Marketing and Business Development with Lloyds Banking Group.
Peter Guy
Peter brings global experience to his financial writing through his international career in investment banking, private equity and developmental banking. He is a weekly business columnist in the south China Morning Post. Peter’s investment and developmental banking experience includes being a director of CLsA Capital, an investment officer at the World Bank. His technology experience includes being a founding investor and member of the board of Flextronics, Inc., one of the world’s largest, offshore subcontract electronic manufacturers and a nAsDAQ index constituent stock.
Richard Norridge
Richard heads up Herbert smith Freehills’ Asia private wealth practice. He acts for high net worth individuals, their families, private banks and other advisers across Asia on a range of contentious and non-contentious trust and probate issues together with charitable and family company matters; this includes advising mental health committees and estate administrators. Richard also has extensive experience in acting for international banks and individuals in cases involving fraud.
Stewart Aldcroft
stewart Aldcroft is Chief Executive officer of Cititrust Limited (Cititrust) in Hong Kong. He is also managing director and Asia Pacific senior advisor for Citi’s Investor services business within Citi’s securities and Fund services (sFs), a business unit of Citi’s Institutional Clients Group. He has been in Hong Kong since 1985, and previously worked at schroders, HsBC, Franklin templeton, Investec and EIP.
NOVEMBER 2014 Vol.12 No.6
EditorialPublisher & Editor-in-Chief Elsa PauManaging Editor Richard Newell
Translators David Wilck Leung Tony Yip
Design Winnie Li Jason Leong
BusinessAssociate Publisher Joanna Tang& Managing DirectorBusiness Development Manager Daniel LauWeb Master Vanson Chan
Disclaimer: the facts and opinions stated or expressed in this publication are for information purposes only and must not be relied upon as being those of the publisher or of the institutions for which the contributing authors work for. Although every care has been taken to ensure the accuracy of the information contained within the publication, the Whole 9 Yards Limited (hereinafter “tW9Y”) does not warrant, either expressly or implied, the accuracy, timeliness, or appropriateness of the information contained in this publication or on its website. tW9Y disclaims any responsibility for content errors, omissions, or infringing material and disclaims any responsibility associated with relying on the information provided in this publication or on its website. no person should rely upon information provided in this publication or on its website as the basis for taking any action or making any decision. neither the publisher, authors and their employers nor Morningstar can be held liable or otherwise responsible in any way, for any advice taken or decision made on the basis of the facts nor opinions expressed or stated herein this publication. 聲明:本文件所刊載或表達的事實及意見僅供參考之用,未必亦不得被認為是出版商或僱用作者的機構之事實及意見。雖然已小心確保文件所載資料的準確性,任何人士不應信賴該等資料作為採取任何行動或作出任何決定的依據,而出版商、作者及其僱主或作為贊助人的Morningstar亦毋須對依據本文
件內所表達或刊載的事實及意見而採取的任何建議或作出的任何決定承擔責任或以任何其他方式負責。
BENCHMARK is also available for reference from selected wealth management centers of following organizations. Please consult your financial planners and investment advisors before making investment decisions.
Preferred signatureLine version
PrudentialAD
The increased market turbulence in October and early November is driving investors to question if they should be repositioning their investment portfolios, whether the current volatility is a new normal, and what will happen to different asset classes as interest rates start to rise and inflation moves further up the agenda.
David Shairp, Global Strategist in J.P. Morgan Asset Management’s Multi Asset Group, says, “It has been six years since the end of the great recession and we are certainly on the road to normalisation. In general, due to continued headwinds, we believe that diversification across geographies and asset classes will be rewarded in the longer term.”
After a period of strong returns in US equities, investors may also want to find out what opportunities may exist in other markets. And according to Axa’s Mark Tinker, “Asia is the place for equities.” Equity markets in Asia Pacific continue to offer attractive valuations compared to other markets and looking ahead, economic reform is expected to be the key driver of returns.
Old Mutual’s Head of Asian Equities, Joshua Crabb says although the world is still unstable geopolitically, he isn’t unduly concerned about the effect on world markets. Furthermore he believes Asia is the region where growth is strongest and most sustainable. He points to the superior growth being produced in Thailand, India, Vietnam, Indonesia and Thailand and risk premiums between developed and emerging Asia converging.
The Global
PorTfolio
環球投資組合
NOVEMBER 2014
8 Personal INveStING8
NOVEMBER 2014
As Crabb identifies, Asia is no longer a homogenous bloc, but intra-region and in the case of China, intra-country, there are different dynamics at play. In China, the downturn in the housing market remains the major risk. The market awaits news of a sustained upswing in the traditionally strong third and fourth quarters. In Japan, the market has been gyrating heavily on news of the sales tax increase and then the postponement of the increase. A rise in real wages remains the key to a recovery in private consumption.
Meanwhile, although several firms have stated their intention to wait on the sidelines as Shanghai-Hong Kong Stock Connect gets under way on November 17th, the potential for a boost to both markets is substantial. Mainland investors will have easier access to many of the blue chip H shares while global asset managers who have already researched second tier industrials on the Shanghai bourse will be keen to find the value in these companies. India’s new government is expected to be successful in pushing through new reforms. And Thailand has responded well to its new military-led government, while Korea is implementing pro-growth measures. So there are plenty of bright spots in the region for investors to take advantage of and new markets, particularly in Greater China and Indochina, providing prospects for the longer term.
Real estateAccording to real estate specialist Jones Lang Lasalle, the economic recovery in the Us will continue to benefit real estate markets in Asia Pacific, as the Quantitative Easing programme orchestrated by the Fed comes to an end. the Us central bank has announced an end to its six-year QE programme, which sought to inject money into the Us economy through large-scale asset purchases in the aftermath of the global financial crisis. Analysing the impact on Asia Pacific’s real estate markets, Dr Megan Walters, Head of Research at JLL, said: “the implementation of QE programmes in advanced economies produced a significant spill-over effect on to developing markets, with strong capital flows from advanced economies. Global interest rates have been driven lower and investors have been deploying additional capital into real estate in the search for yield. In Asia Pacific, these two factors created a wave of investment in real estate that led governments in China, Hong Kong and singapore to implement regulations to cool real estate markets, primarily focused on residential property. the ending of Us QE will be another step towards these governments deciding to lift or ease their cooling measures. the impact of potential interest rate rises from the end of Us QE and any effect on commercial real estate yields should be off-set by the expectation of rising rents in most major office markets in the region. In the first nine months of 2014, the global and inter-regional capital flows into Asia Pacific commercial real estate (from global, Us and Europe investors) exceeded last year’s total by 35 percent. Continuing economic recovery in the Us appears to be providing Us and global investors with the funds to deploy in Asia Pacific and we expect that picture to continue in the medium term. Investors will continue to see core real estate as a highly attractive asset class and Asia Pacific will remain attractive as international investors continue to diversify their portfolios.”
CurrenciesAs we look into 2015, AXA’s Mark tinker says investors need to consider some new tail risks from a stronger dollar – currency wars, the need to buy inflation not deflation hedges, further falls in gold and a reversal of many of the anti-dollar trades of the last five years. “the Us may become a source of investment rather than a source of funding,” he says. “one immediate impact has been on other Asia, where exporters to the Us (e.g. Korean autos) have been hit by the prospects of an increasingly competitive yen, now back to levels not seen since just before the crisis. For Fibonacci fans (who seem to be all over these currencies at the moment) the return to pre-GFC levels represents a 76.4% retracement of the full rally from the lows of 2007. that break suggests a target of below eight on yen/won from here, which would make a lot of Korean corporates very nervous. obviously it is not just Korea, other Asian export oriented countries like taiwan will be concerned by the move in the yen, although as ever from an equity point of view it is important to focus on other competitive aspects. It is those companies competing on price that are most affected. nevertheless, this raises the first risk to think about for next year, currency wars.” this is not just yen weakness, there is a broader issue of dollar strength. Bank of America Merrill Lynch Global strategist, Michael Hartnett, points out there is now a prospect of genuine rate differentials starting to emerge to drive currencies. the caveat Michael Hartnett had to this story was that even his eight year old son is bullish of the Us dollar. threadneedle’s Mark Burgess adds that the major plus for risk assets is the boost to consumption and industry in the developed world that should arise from a weaker oil price. the flipside is greater fiscal pressure and currency volatility for oil-producing nations. time will tell if the decline in oil is sustainable or just a phase, but falling energy prices (and hence weak inflation prints) should mean there will be little or no pressure for developed world central banks to contemplate raising interest rates until at least the second half of next year.
educationEducation is one of the most pressing socio-economic challenges today. It is a major component of well-being and a key measure of economic development and quality of life. It contributes to poverty alleviation, gender equality, health, and environmental sustainability. However, barriers to school enrolment and completion mean that, globally, there an estimated 793 million illiterate adults (two-thirds of which are women) and close to 100 million children who are not in school.
Education spending is already very large (accounting for around 5% of global GDP). According to the United nations, every dollar invested in education is estimated to generate Us$10-15 in economic returns, and expenditure is expected to continue to grow by at least 7-8% to 2017. Factors driving this growth include higher enrolment targets, demographic opportunities (booming population of 5-17 year olds in emerging markets), more women in education, the increase in the middle-income bracket in emerging markets (disposable spending on education in China, India and Brazil is just 10-13%), increasing global mobility, and a growing realisation of employment, earnings and economic development needs and opportunities. It is estimated that, over their lifetime, developed market graduates earn more than Us$1 million compared to early school leavers. Growth in the private sector is expected to be at least double the overall 7-8% spend as governments increasingly seek public-private partnerships to tackle the education challenge. For example, e-learning expenditure is expected to continue growing at 20-25% compound annual growth rate over the next decade. In Australia, according to oxford Economics, by 2020, an additional 50,000 international students per annum will study higher education – the highest absolute growth of any country in the world.
The
PortfolioReview投資組合概覧
NOVEMBER 2014
10 Personal INveStING
115%
Infrastructure
Cash
Climate
education
Cash Judging by recent fund investment flow figures, As investors confront both a shifting interest rate environment and far-reaching regulatory reforms, JP Morgan Asset Management has released the findings of its Global Liquidity survey, taking responses from over 300 CIos, treasurers and other senior decision makers. the key finding is that liquidity is still a central concern, as reflected in the choice of investments: half of global cash assets are placed in bank deposits. Usage is most prevalent in Asia, where 68% of assets are held in bank deposits, compared to 48% in Europe and 38% in the Americas. Money market funds account for over one-third of cash assets in the Americas. In an effort to control risk, investment policy for the majority of respondents’ focuses on defining portfolio duration and credit standards for long and shorter-term securities. Larger investors tend to be less conservative in their definition of permissible credit rating, which allows them to take on additional interest rate and credit risk. A majority of respondents plan to stay the course with their current cash allocation through 2015, even in the face of low interest rates and regulatory concerns. Firms with larger cash balances have a broader set of investment guidelines. A third or more of larger firms permit investment in asset-backed securities or mortgage-backed securities. Investors with relatively smaller cash balances typically have fewer investment options at their disposal. separately managed accounts, customised portfolios that allow investors to define their own risk, security and liquidity parameters, account for a significant share of cash allocations. In the Americas, 11% of cash assets are invested with sMAs specialist managers. Investor demand for sMAs can be seen as a clear demonstration of the need for yield.
Climate AgreementAs the new York times wrote, “the historic announcement by President obama and President Xi Jinping that they will commit to targets for cuts in their nations’ carbon emissions has fundamentally shifted the global politics of climate change.” the agreement, which saw China set targets for a scaling down of its pollution by 2030, has given a fresh jolt of optimism to negotiations aimed at reaching a new international climate treaty next year in Paris, where the American and Chinese targets are expected to be the heart of the deal. Former Us vice president Al Gore commented, “to reduce their nations’ carbon emissions is a major step forward in the global effort to solve the climate crisis. Much more will be required - including a global agreement from all nations - but these actions demonstrate a serious commitment by the top two global polluters” the investment implications of this could be substantial, given that America and China are the world’s biggest polluters, and that other countries that have dismissed climate targets, such as Australia, may be forced to backtrack on their reluctance to fall into line. An acceleration in climate change investment vehicles, as well as an increase in research and development in this area, will produce new opportunities for early stage investors as a well as portfolio managers. By 2030, China has pledged that 20% of its energy will be renewable. this is ambitious given the country’s addiction to coal and requires a greatly increased commitment to energy sources that do not depend on fossil fuels. some experts have said that China should try to halt the growth of its emissions by 2025.
InfrastructureFrom an Asia perspective, the prospect for fast tracking the trans-Pacific Partnership (tPP) trade agreement is a real potential positive, although clearly China is pushing for a full Asia-Pacific Economic Cooperation (APEC) agreement at the conference this week in Beijing. It is also talking about large scale, long term infrastructure investment and a new silk Road and maritime silk Road, a massive investment programme over the next 20 years that is being referred to in some quarters as a Chinese ‘Marshall Plan’. one part of the package is a $16 billion plan to boost rail infrastructure inside China along the planned route, while the second part of the plan involves the new Asian Infrastructure Investment Bank lending $50 billion to $100 billion for infrastructure projects to other countries on the route. Focussing heavily on rail infrastructure and ports it is a hugely ambitious plan to link China with the rest of the world, even as far as tunnelling under the Bering strait to Canada. the authorities refer to it as a silk Road economic belt with the slogan ‘one belt one road’. As with everything in China the numbers can be stratospheric, with one long term estimate from Want China times (here) suggesting the total scale of the project could be $21 trillion. Whatever the number, the real point is that China’s savings will increasingly be channelled into productive infrastructure – rather than ghost cities and housing projects – meaning that Chinese growth will remain skewed towards investment. Consumption will grow, but will not have to do all the heavy lifting as some fear.
schroders’ global bond team says that despite a flow of potentially disruptive news, fixed income markets have broadly progressed. But in mid-october, investors were
startled by a ‘flash-crash’ in the 10-year treasury yield, which dipped below 2% for a very short time. the move did not appear to be precipitated by any clear negative factor, and largely recovered by the end of the month. through october, the 10-year treasury yield fell from 2.49% to 2.34%, and the 10-year gilt yield fell from 2.43% to 2.25%. the German 10-year bund yield fell from 0.95% to 0.84%, and peripheral yields remained at historic lows. the Italian 10-year yield rose slightly from 2.33% to 2.35% while the spanish equivalent fell from 2.14% to 2.08%.
Michael Hasenstab, Global Bonds CIo at Franklin templeton says it is time for fixed income investors to think outside traditional boxes. He believes that with today’s market environment and the prospect of rising Us interest rates on the horizon, investors need to rethink their core fixed income portfolio. He says the strategy needs active management “to be able to adeptly invest in the relative strength of select countries and currencies while avoiding the weakness of others - something an index cannot do. second, it should be well-poised to deliver a negative correlation to Us treasuries, given the seemingly inevitable eventual rise in interest rates. notably, while some strategies claim to have a negative duration, that is not synonymous with the more important goal of having an overall negative correlation to Us treasuries. ”
PIMCo’s CIo for Us Core strategies, scott Mather says, “With easier monetary policy in the eurozone, Japan, China and many emerging markets, we expect plenty of liquidity in the marketplace. Broad market liquidity facilitates portfolio liquidity, allowing investors to allocate a portion of their holdings to cash or cash-like instruments that they can deploy when markets correct, such as we saw last month.
In this section of Benchmark, the team have created a methodology for assessing one specific fund sector every month. Funds are designed to be held for the medium to long term, so it is important for investors to pick the right fund/manager to ride through the upcoming volatility. Over the following pages, we have whittled down the locally registered Global Fixed Income funds to a Top 10 that we believe have the qualities of consistency and reliability. 在本欄,我們《指標》團隊以獨特創建的評選方式,每個月為一組基金類別進行評估。基金是屬於
• We’ve screened all HK authorized – Global Fixed Income funds• only funds with minimum initial investments equal or less than UsD 50,000 to eliminate institutional classes being included into the
assessment process• We’ve considered quantitative data such as the funds’ risk-adjusted returns for 1, 3 and 5 years, fees, manager’s stability and
experience, accessibility and other risk ratios to measure upside and downside volatility• While the past performance cannot always be an indicator of future performance, it is possible to make some educated judgments
based on the available data. our aim is to help investors make wiser decisions by analysing relevant information on performance, volatility, portfolio diversification, fees and operations.
Total Ret YTD 本年至今 3.111 YR Return 一年 6.373 YR Return 三年 7.675 YR Return 五年 4.65Sortino Ratio 3 YR 2.54Total Expense Ratio 總開支比率 1.17Manager Name 基金經理 Management TeamAve Mgr 基金經理平均年資 5.33Worst 3 Mo Ret % 最差3個月回報 -10.65Std Dev 3 Yr %標準差 10.17Morningstar Rating 3 Yr 星號評級 ÙÙÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 69.23# of Holdings 持有股票項目 205Turnover %十大投資項目比重% 650.38
Total Ret YTD 本年至今 3.361 YR Return 一年 2.613 YR Return 三年 5.895 YR Return 五年 2.92Sortino Ratio 3 YR 1.10Total Expense Ratio 總開支比率 1.34Manager Name 基金經理 Cédric
Morisseau;Laurent Crosnier;
Ave Mgr 基金經理平均年資 5.79Worst 3 Mo Ret % 最差3個月回報 -12.65Std Dev 3 Yr %標準差 7.56Morningstar Rating 3 Yr 星號評級 ÙÙÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 279.94# of Holdings 持有股票項目 157Turnover %十大投資項目比重% -34.43
Top 10 Holdings % Port.Cnpc General Cap 2.75%2019-05-14 1.02Wells Fargo Co Mtn Be 4.1%2026-06-03 0.99Adcb Fin (Ky) 2.75%2019-09-16 0.98 0.98Teachers Ins & Annuity Assn 144A... 0.98
Top 10 Holdings % Port.Portugal(Rep Of) 4.75%2019-06-14 3.90Italy(Rep Of) 3.75%2016-04-15 3.87Italy(Rep Of) 5.75%2016-07-25 3.24Amundi Fds Bd Global Corporate... 2.89
Top 10 Holdings % Port.Pgh Cap 5.75%2021-07-07 0.96Total Stock Holdings 0Total Bond Holdings 173Assets in Top 10 Holdings % 13.31
Top 10 Holdings % Port.Bulgaria(Nat Rep)... 2.79Total Stock Holdings 0Total Bond Holdings 77Assets in Top 10 Holdings % 52.44
NOVEMBER 2014
16 Editors' ChoICe
34
BGF Global Government Bond A2 USD 貝萊德全球基金—環球政府債券基金A2 - USD
Total Ret YTD 本年至今 2.161 YR Return 一年 2.263 YR Return 三年 1.245 YR Return 五年 2.91Sortino Ratio 3 YR 0.69Total Expense Ratio 總開支比率 0.05Manager Name 基金經理 Management TeamAve Mgr 基金經理平均年資 10.67Worst 3 Mo Ret % 最差3個月回報 -7.55Std Dev 3 Yr %標準差 2.59Morningstar Rating 3 Yr 星號評級 ÙÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 512.36# of Holdings 持有股票項目 69Turnover %十大投資項目比重%
Top 10 Holdings % Port.Bundesrepublik Deutschland 1.75%2024-02-15 12.96Bundesobligation 1.00%2018-10-123 8.13Italy Buoni Poliennali Del Tesoro... 5.35Bundesrepublik Deutschland 2.00%2023-08-15 5.32Spain Government Bond 3.80%2024-04-30 4.77
Top 10 Holdings % Port.US Treasury Note 0.5%2016-07-31 8.49Japan(Govt Of) 1%2021-09-20 6.32Japan(Govt Of) 1.1%2020-06-20 5.205 Year US Treasury Note Future... 5.06Euro-Bobl Dec 14 12/08/2014 3.88
Total Ret YTD 本年至今 6.041 YR Return 一年 5.713 YR Return 三年 4.845 YR Return 五年 4.14Sortino Ratio 3 YR 3.63Total Expense Ratio 總開支比率 0.97Manager Name 基金經理 Scott ThielAve Mgr 基金經理平均年資 3.08Worst 3 Mo Ret % 最差3個月回報 -3.56Std Dev 3 Yr %標準差 2.52Morningstar Rating 3 Yr 星號評級 ÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 584.31# of Holdings 持有股票項目 219Turnover %十大投資項目比重% 115.72
Top 10 Holdings % Port.France(Govt Of) 1.75%2023-05-25 2.73Japan(Govt Of) 1.8%2031-09-20 2.53Us Ultra T-Bond Dec 14... 2.43Japan(Govt Of) 2.1%2027-12-20 2.42
Top 10 Holdings % Port.Japan(Govt Of) 1.5%2034-06-20 2.39Total Stock Holdings 0Total Bond Holdings 220Assets in Top 10 Holdings % 41.45
www.FundAsia.net
17Editors' ChoICe
Source: Morningstar / Benchmark
5
7
BGF World Bond A1 USD 貝萊德全球基金—世界債券基金A1
Legg Mason WA Global Credit Inc A Inc (S) $ 美盛西方資產環球信貸基金 A Inc (D) $
Total Ret YTD 本年至今 5.821 YR Return 一年 5.413 YR Return 三年 4.605 YR Return 五年 4.28Sortino Ratio 3 YR 3.02Total Expense Ratio 總開支比率 1.05Manager Name 基金經理 Scott ThielAve Mgr 基金經理平均年資 8.08Worst 3 Mo Ret % 最差3個月回報 -5.71Std Dev 3 Yr %標準差 2.66Morningstar Rating 3 Yr 星號評級 ÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 1,211.60# of Holdings 持有股票項目 342Turnover %十大投資項目比重% 107.84
Total Ret YTD 本年至今 5.181 YR Return 一年 4.313 YR Return 三年 4.865 YR Return 五年
Sortino Ratio 3 YR 1.95Total Expense Ratio 總開支比率 1.36Manager Name 基金經理 Management TeamAve Mgr 基金經理平均年資 4.00Worst 3 Mo Ret % 最差3個月回報 -3.59Std Dev 3 Yr %標準差 4.06Morningstar Rating 3 Yr 星號評級 ÙÙFund Size (USD Mil) 基金規模 (百萬美金) 98.49# of Holdings 持有股票項目 239Turnover %十大投資項目比重% 50.82
Top 10 Holdings % Port.US Treasury Note 0.5%2016-07-31 5.892 Year US Treasury Note Future... 5.82Japan(Govt Of) 1%2021-09-20 3.76US Treasury Bill2015-04-02 3.1410 Year US Treasury Note Future... 2.71
Top 10 Holdings % Port.Us Ultra T-Bond Dec 14... 2.67Euro-Bobl Dec 14 12/08/2014 2.205 Year US Treasury Note Future... 1.99Fnma 30yr 4% Llb 85k 20142044-01-04 1.85
Top 10 Holdings % Port.Japan(Govt Of) 1.5%2034-06-20 1.76Total Stock Holdings 0Total Bond Holdings 289Assets in Top 10 Holdings % 31.79
Legg Mason BW Glb Fxd Inc A Inc (S) $ 美盛布蘭迪環球固定收益基金 A USD INCTotal Ret YTD 本年至今 4.941 YR Return 一年 4.093 YR Return 三年 2.595 YR Return 五年 4.95Sortino Ratio 3 YR 0.73Total Expense Ratio 總開支比率 1.39Manager Name 基金經理 David F. Hoffman;Stephen
S. Smith;Ave Mgr 基金經理平均年資 11.17Worst 3 Mo Ret % 最差3個月回報 -14.35Std Dev 3 Yr %標準差 5.27Morningstar Rating 3 Yr 星號評級 ÙÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 1,468.39# of Holdings 持有股票項目 3,575Turnover %十大投資項目比重% 164.09
Top 10 Holdings % Port.Ireland(Rep Of) 5%2020-10-18 3.78Ireland(Rep Of) 5.4%2025-03-13 2.28Poland(Rep Of)2016-01-25 2.27Mexico(Utd Mex St) 8%2015-12-17 2.25Bk Of Korea 2.76%2015-06-02 2.14
Total Ret YTD 本年至今 5.481 YR Return 一年 5.483 YR Return 三年 5.245 YR Return 五年 5.10Sortino Ratio 3 YR 2.12Total Expense Ratio 總開支比率 1.04Manager Name 基金經理 Wesley A. SparksAve Mgr 基金經理平均年資 3.67Worst 3 Mo Ret % 最差3個月回報 -5.54Std Dev 3 Yr %標準差 3.94Morningstar Rating 3 Yr 星號評級 ÙÙFund Size (USD Mil) 基金規模 (百萬美金) 2,651.30# of Holdings 持有股票項目 237Turnover %十大投資項目比重% 237.38
Total Ret YTD 本年至今 3.821 YR Return 一年 4.423 YR Return 三年 5.545 YR Return 五年 6.23Sortino Ratio 3 YR 1.14Total Expense Ratio 總開支比率 1.40Manager Name 基金經理 Michael J. Hasenstab;
Sonal Desai;Ave Mgr 基金經理平均年資 8.12Worst 3 Mo Ret % 最差3個月回報 -7.99Std Dev 3 Yr %標準差 7.68Morningstar Rating 3 Yr 星號評級 ÙÙÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 38,502.18# of Holdings 持有股票項目 209Turnover %十大投資項目比重% 50.05
Top 10 Holdings % Port.Sweden(Kingdom Of) 4.5%2015-08-12 2.10Hungary Rep 6.375%2021-03-29 2.05Bk Of Korea 2.78% 1.75Canada Govt2015-02-01 1.71
Top 10 Holdings % Port.US Treasury Bond 3.75%2041-08-15 1.51Japan(Govt Of) 1.2%2020-12-20 1.49Total Stock Holdings 0Total Bond Holdings 340Assets in Top 10 Holdings % 27.72
Top 10 Holdings % Port.Malaysia 4.72%2015-09-30 1.54Total Stock Holdings 0Total Bond Holdings 135Assets in Top 10 Holdings % 21.88
9Templeton Glbl Total Return A Acc $ 鄧普頓環球總收益基金—A-ACC-$
Total Ret YTD 本年至今 2.521 YR Return 一年 3.973 YR Return 三年 7.045 YR Return 五年 8.46Sortino Ratio 3 YR 1.32Total Expense Ratio 總開支比率 1.41Manager Name 基金經理 Michael J. Hasenstab;
Sonal Desai;Ave Mgr 基金經理平均年資 7.54Worst 3 Mo Ret % 最差3個月回報 -10.04Std Dev 3 Yr %標準差 8.26Morningstar Rating 3 Yr 星號評級 ÙÙÙÙÙFund Size (USD Mil) 基金規模 (百萬美金) 34,730.37# of Holdings 持有股票項目 490Turnover %十大投資項目比重% 17.58
Top 10 Holdings % Port.Korea(Republic Of) 2.75%2015-12-10 2.66Portugal(Rep Of) 5.125%2024-10-15 2.48Uruguay Rep 4.375%2028-12-15 2.32Bk Of Korea 2.47%2015-04-02 2.21Mexico(Utd Mex St) 8%2015-12-17 2.19
Top 10 Holdings % Port.Ireland(Rep Of) 5.4%2025-03-13 2.11Vereinigte Mexikanische2015-04-01 2.05Bk Of Korea 2.74%2015-02-02 2.03Sweden(Kingdom Of) 4.5%2015-08-12 1.82
Top 10 Holdings % Port.Bk Of Korea 2.76%2015-06-02 1.78Total Stock Holdings 1Total Bond Holdings 387Assets in Top 10 Holdings % 21.65
“How can my MPF be a benefit when it seems like a tax on earnings?” Stewart Aldcroft explains how, over time, the benefits will show themselves clearly.
For many people, the Hong Kong Mandatory Provident Fund seems like an additional tax on their earnings, albeit, quite small. Every month a little is taken away
and put into an account that can’t be touched for many years to come.
With the absence of active advice on how to get the best out of your MPF, most Members of MPF schemes have tended to ignore it, not so much in the hope that it will go away, but because they can’t be bothered to spend time on something they think is worth so little.
slowly, but surely, this is no longer the case. For those that have been Members for the whole of the 14 years since it started, they will by now have begun to see a reasonable balance grow up in their MPF account, and one that deserves a lot more attention in the future.
For the purposes of this article, I plan to cover a few key issues all MPF Members should take into account, in order to fully utilize the benefits MPF offers.
1. Additional voluntary Contributions (AvC)While it is a mandatory requirement that there are minimum contributions made monthly to an MPF of 5% of salary up to HK$30,000 per month (since 1 June 2014) or up to HK$1,500 by both the employer and employee, this should not be treated as the maximum as well. there is no reason why an employee shouldn’t put a lot more into the MPF, especially for higher earning employees, who would otherwise not know what best to use for their savings. Any contributions made in this way to the MPF get the benefit of buying units in the various available funds at the lowest possible costs. there are no loads and management fees are generally lower than apply for regular mutual funds.
there is also a wide choice of funds available in most MPF schemes these days. Whether investing in the Us equity market, Asian region equities, or just into the Hong Kong market, most MPF providers offer the choice. And if you don’t want to make these choices, then there are funds that will do it all for you.
Maximising your benefits from the MPF把強積金的得益最大化
NOVEMBER 2014
20 MPF UPdAte20
Although it might be the case that the accumulated value of an MPF is not available to use for day-to-day spending, for medical or school fees, or to repay mortgages, for many people this form of “enforced savings” can be their only way to ensure they have some money with which to retire. It won’t be the whole of their retirement income, but the more that is put to work via an MPF, especially in the early days of a working life, the more that can become available on retirement.
2. Fund choices As contributions are made on a monthly basis, selecting a fund that provides a volatile return actually can provide a far better return over the longer term, that a fund that in more constant. Volatility is good, it enables purchases to be made when markets are down as well as up, and this takes out of the investment equation, the emotional aspect of trying to choose which market is best. For younger MPF Members, it is far better to choose equity funds that can provide the opportunity to benefit from longer term investment trends. As you get older, then a variation can occur, such as moving some money into managed or balanced funds. only when in the last year or two before retirement actually occurs is it really necessary to proactively ensure the accumulated gains
made are preserved. this can be achieved through use of lower risk fund choices, which will also depend on what your MPF provider can offer.
Choosing and then changing fund choices during the course of an MPF lifetime should be strongly encouraged. All providers have arrangements in place to enable this to be done easily and with the minimum of documentation.
3. taking Retirement Benefitsthe way the MPF is set up, (in most circumstances) only when you retire can you have access to the accumulated assets built up. But if you don’t have any immediate need for them, there can be good reasons not to draw down from the MPF pot straight away. If markets are at an unfavourable stage, then maybe it is best to wait awhile before taking money out. this can lead to greatly improved returns if the timing is handled well.
Despite the many reports to the contrary, the MPF is quite a flexible vehicle with which to accumulate savings. You can keep control on where your contributions are invested, when you draw them out and of course on how much you have put in to create a savings pot.
Guidance on MPF accounts from the MPFA website-mpfa.org.hk
The need to generate regular income on your investments is of particular concern to those at or near retirement. But every investor should understand how bonds and interest-paying capital notes can work for them within a diversified portfolio, writes Richard Newell
In simple terms, your equity investments are expected to appreciate over the longer term, to provide a nest egg. Meanwhile the bond and deposit element of your savings
is generating income for day-to-day living. Retirees typically want a regular income to supplement their retirement savings and they also want a sizeable emergency fund to pay for unexpected costs like medical bills. Retirees who can realistically expect to live at least another 15 to 20 years, must keep some of their investments in higher return assets. this is the money they’ll be drawing on in 10 years’ time. the majority of the money should be held in a variety of fixed interest issues, with some set aside in an emergency fund like a savings account.
the current environment of low inflation and low growth in many parts of the world translates into uncertain share markets and rates of interest that are historically low. People are getting lower returns than they expected on their investments, but of greatest concern possibly is the decline in their income levels.
At a time when the dividend yield on some shares is outstripping the interest on fixed term deposits and government bonds, financial planners need to be vigilant in making sure their clients are appropriately positioned to benefit from this.
Managing the income elements of a client’s portfolio is a key part of the service for clients. And since these people are
naturally risk-averse, it’s best to keep things simple. Look at the range of maturities and try to ensure that these are evenly spread over say a five year term. so clients are not making any big macro decisions about the course of interest rates. You are taking away the worry about whether interest rates are going down further in the short term, by averaging out their interest return over a reasonable time period. they won’t be getting the lowest rate and they won’t always be getting the top rates either, but over time they will get more of a steady income stream.
As we know, each client has a slightly different objective, but most have one thing in common; they overestimate their own risk-tolerance. Even within the confines of a bond portfolio, it’s important to establish the right level of exposure for their needs from the start and for the client to be careful not to overestimate potential returns.
the greatest risk when rates are declining is for the client to move too far up the risk scale in search of a higher income. Investors do need to be aware of the risks involved in moving into some of higher yield capital note issues. Do you consider that your clients are equipped to grasp the concept of sub-ordinated debt? some will understand, but to be safe, the adviser should limit the amount held in any one investment to between 5% and 10% of the fixed interest portfolio. there isn’t enough understanding of the differences between an investment paying 7% and one paying upwards of 9%.
It is wrong to assume that issues that carry a higher headline interest rate are dramatically more high risk. some are, and it is not uncommon that investors in mis-priced un-rated debt securities do not get a return commensurate with the risk they are taking. the good adviser will have a clear understanding of fixed interest schedules and structured products available, and their suitability for different types of client.
In managing credit risk, an adviser needs to consider how much debt relative to equity an issuer carries in its balance
Managing income when rates are low
在利率偏低時管理收益
www.FundAsia.net
23Financial PLANNING
將近或已經退休的人一般會
特別關注能否從投資中賺取
定期收入。所有投資者均需
要理解債券和付息資本票據如何從多元化投資
組合中為這類人士達成目標。編者:Richard newell。
簡單來說,你的股票投資應該在長遠而言有
增值空間,以提供個人儲備金。同時,用
作儲蓄的債券和存款則賺取用作日常開支
的收入。退休人士一般希望賺取定期收入作為退休
儲備金的一部份,以及持有一筆可觀的緊急資金以
應付突如其來的賬單(例如醫療支出等)。實際上預
期未來人生尚有15至20年的路要走的退休人士,必須將部份投資投放於更高回報的資產,因為這是
未來10年會提取使用的資金。大部份資金應投放於各種不同的定息證券,其餘的則存於緊急基金(例
如儲蓄賬戶)。
現時世界上很多地方都有低通脹和低經濟增長的現
象,導致股票市場不明朗以及息率創歷史性新低。
投資人士從投資所得的收入比預期低,而最大的關
注是他們的收入水平下降。
每當某些股票的股息回報率超出定期存款和政府債
券提供的利率,財務策劃師就要格外留神,確保採
取適當持倉以令客戶能從中獲利。
管理客戶投資組合內的收入元素是主要的客戶服
務。由於退休人士通常是希望避免風險的投資者,
sheet, how much senior debt may rank above its paper, its cash flows and its interest cover (how many times its earnings will cover its interest costs). the do-it-yourself portfolio builder needs to consider interest rate risk, the direction or trend for rates and credit risk, the likelihood that the issuer will default. the last factor is largely determined by reference to the credit rating of the bond issue or, more accurately, the issuer.
You can get capital gains from both bond markets (from falling yields) and equity markets at the same time. one of the most effective ways of managing your portfolio to boost the income element is to skew your share portfolio towards the high dividend shares. It pays to look at overseas markets, for a broader range of high-yielding share opportunities.
因此令事情越簡單越好。留意所有投資項目的到期
日,嘗試確保它們(例如在五年期間)平均分布,讓
客戶不會就息率期作出任何重大宏觀決定。將客戶
的利息回報平均分布於合理的期間,可以釋除他們
關於息率在短期內會否下降的憂慮。他們不會得到
最低或最高的利率回報,但可隨著時間得到穩定的
收入。
就我們所知,每名客戶的目標都稍為不同,然而都
有一個共通點:高估了自己承受風險的能力。即使
在債券投資組合的規限內,一開始就客戶需要設置
適當的風險水平,以及讓客人注意不要高估潛在回
報是相當重要的。
利率下降時,當中最大的風險是
客戶為了賺取更高收入而承受更
高風險。投資者需要注意投資於
更高收益率的資本票據所涉及的
風險。你認為你的客戶理解「後
償債項」的概念嗎?有些客戶會
理解,然而為安全起見,投資顧
問應該將任何一項投資的所持金
額限制於定息投資組合的 5%至10%。對於兩個分別能賺取7%及9%以上的投資項目,一般人仍
未能充分理解它們之間的分別。假定提供更高息率
的證券必然會附隨極高風險是不正確的。雖然有些
個案確是如此,然而投資者投資於錯定價格的(未
經率定)債務證券,最後未能賺取與所承受風險相
稱的回報亦是常見情況。出色的投資顧問應該要清
楚知道支付定息的時間表和可供選擇的結構性產
品,以及它們對於不同類型客戶的合適程度。
管理信貸風險時,投資顧問需要考慮發行公司的資
產負債表中有多少與股票相關的債項、票據附有多
少優先債務、其現金流以及利息支出佔淨利的比例
(盈利對利息倍數)。建立度身定製投資組合的顧
問,需要考慮息率風險、利率以及信貸風險的走向
或趨勢,以及發行公司違責的可能性。違責的可能
性很大程度上可憑籍發行債券(或更準確來說是發
行公司)的信貸評級確定。
你可以同時從債券市場(從下降收益率)和股票市場
中賺取資本收益。管理你的投資組合以提升收入元
素的其中一個最有效的方法是將股票投資組合內的
股票轉為高股息股票。留意海外市場,以尋找更廣
泛的高收益股票投資機會。
The Theft of Art 藝術品盜竊
NOVEMBER 2014
24 Financial PLANNING
In China, rather than museums and cultural institutions being the victims of theft, as it tends to be in
the West, it is often the homes and offices of high net worth individuals or public figures that are targeted by art thieves. China also struggles with a huge counterfeit art market. A 2012 Artron study estimated that about a quarter of a million people in China are involved in producing and selling fake art, which has been said to often jeopardise the successful sale of authentic pieces.
Yet in a country where the number wealthy individuals is rising rapidly and such individuals tend also to have an increasing appetite for fine art , there are no specific criminal laws that
While art trafficking is not a new phenomenon in western jurisdictions, there has been a lot more interest surrounding the theft of Chinese art from European museums in recent years. Yet not much has been said about how art is being sought out and focussed on in China by criminals and forgers. Richard Norridge provides the background.
focus on either the theft of or counterfeiting of art works or heritage items. In fact, applicable laws absolve auctioneers or consignors of any responsibility as to fakes. Further, China does not yet have a domestic database of stolen art of cultural property, unlike many European and north American countries which makes it extremely difficult to monitor let alone police thefts and forgeries.
Will things change? In 2012, the Chinese government acknowledged that the art industry and market have issues and it might therefore introduce new legislation to target those problems. It has been reported that the government is aiming to crack down on the “three fakes”—fake works, fake
sales and fake auctions. there has yet to be any progress in that aspect.
Here is a list of pointers on the background and recent developments in art theft and forgeries.
The Art of Theft Cost, Development and Impact• Art theft is not just limited to
Europe and the Americas - over the last 5 years China has become one of the leading art markets in terms of revenue. In 2011, China was cited as the leading art market in the world.
• the cost of the theft of art and antiques in the UK alone every year is estimated to exceed £300 million. the media frequently cites
The Theft of Art 藝術品盜竊
www.FundAsia.net
25 Legal BRIeFING
the statistic that trafficking in cultural property is the third most common form of trafficking, after drug trafficking and arms trafficking.
targets• In Europe, the targets of art theft
tend to be museums, galleries and institutions. By way of comparison, targets in China tend to be wealthy individuals, even goliaths such as the Forbidden City have been the victim of theft.
• Europe appears to be the victim of a growing trend of “thefts to order” often suspected to be sourced for and requested by Asian buyers.
Faking it• China’s historical approach to art
presents its own problems. In China, artists are frequently trained to imitate the old Chinese masters.
• the number of artists who create copies of Chinese works of art is growing. Fake art works have caused concern within the Chinese art market and doubts over the authenticity of a number of works of art sold via auction houses.
• Doubts over authenticity have led to a number of high net worth sales in China not being completed.
• China’s existing legislation prevents any substantive reform or clean-up of the art market. the applicable laws currently absolve auctioneers or consignors of any responsibility as to fakes.
• the Criminal Law of the People’s Republic of China does not contain any specific provisions which refer to the theft of art works or heritage items means that it is difficult to police thefts of art and to enforce any specific penalty in the event that a fake work of art or a stolen work of art is sold at auction or otherwise.
Chinese art thefts• A Chinese farmer shi Baikui was
sentenced to 13 years imprisonment, deprived of his political rights for three years and fined 13,000RMB for stealing nine pieces of art made of gold and jewels from the Forbidden City.
Chinese forgeries• the late Qi Baishi, a modern
master of traditional Chinese Painting, has been the victim of a huge number of forgeries and is so extensively “faked” that no one can be sure if Baishi’s painting are authentic unless the painting has either been recorded in his lifetime or his family can verify that the painting is an original.
Major Asian art acquisitions• It was reported that in november
2013, a series of art auctions in Hong Kong held by Christie’s Auction House raised HK$3.82 billion (£300 million), almost twice as much as estimated, as affluent collectors from China and elsewhere in Asia paid record prices for several items, including a Qing dynasty porcelain jar which sold for HK$64.52 million (£5 million).
Why is this type of crime on the increase?Lack of Centralised Resources and Records• the lack of any centralised record
in China means not only that there is an ineffective approach to the registration of thefts of artworks in China but that policing the theft of artis increasingly difficult.
Increase in Prices and Profile of Artworks• In December 2013, sotheby’s sold
on behalf of the Art Institute of Chicago a large swirling abstract from 1958 by Zao Wou-Ki for which a record 89.7 million RMB (£9 million) was paid by Zhang Xiaojun, a collector from shanxi province.
• the huge expansion of the art market in China has created a frenzy of purchasing which the regulators cannot keep up with.
What is being done?• the Chinese government has
acknowledged that the art industry and market has issues and in 2012 it indicated the possibility of introducing new legislation to target these problems.
• 2013年12月,蘇富比代表芝加 哥 藝 術 博 物 館(the Art Institute of Chicago)出售趙無極在1958年創作的《抽象》,由來自山西省 5的收藏家張小軍
以破記錄的人民幣89,700,000元(9,000,000英磅)購入。
• 中國藝術品市場的大規模擴展造成了購買熱潮,監管機
構未能跟上進度。
作出了什麼補救措施?
• 中國政府確認藝術品業界和市場出現了問題,並在 2012年指出可能會推出新法例以
解決這些問題。
• 根據報道,政府的目標是打擊「三假」現象——造假、售
假和假拍,因為「三假」損害
了中國藝術品市場在國際舞
台的聲譽 6。
Christian Stewart explains how family offices that have as their mission the preservation of family wealth, in all of its forms, must also address the topic of family member education.
In practice family offices in Asia tend to start off with a focus on preserving family financial capital. they may be organized with an investment committee. the natural next step is for the Fo to start to assist the family members with the family’s social
capital, i.e. with the family charity and philanthropy. there might be a family philanthropy committee.
Families set up Fos to help preserve family wealth. It is common to refer to “family wealth” as going beyond the financial and the social capital of the family to also include family human capital and intellectual capital. What role can the Fo play in relation to human and intellectual capital?
Just as there will be an investment committee and a philanthropy committee, there should be an education committee. And the first task for the education committee will be the development of a family education curriculum.
the Family Governance Systemthe well-known “three circle model” allows us to look at a wealthy family and its financial assets as a complex system comprising of the overlap between the family circle with its dynamics, the ownership circle (the perspective of the owner/investor) and the management circle (looking at how the financial wealth is being managed).
the key to managing this complex system is having an effective system of family governance. this includes having appropriate forums for each “circle” and well defined
Developing a Family Education Program發展家族教育計劃
NOVEMBER 2014
28 Family oFFICeS
boundaries between them. the education curriculum has to include making sure that the family members are properly educated on their family governance system and the different roles that it entails.
the three circle model also helps us to see that that family members need to be educated on the ownership role; they do not need to be educated on the management role (though they can be educated on how to select and use advisors). over the long run ownership is more important than management. As owners the family members need to be competent to make any key decisions that have to be made at the ownership level. the curriculum has to deal with the topic of how to be an effective owner.
the trust Relationship Another key topic is that of trusts, or more specifically the trustee beneficiary relationship. the sFo does not own the family financial wealth. the most common ownership vehicle will be one or more family trusts. A trust is fundamentally a relationship between the trustee and the beneficiaries. If you look at the Us experience, the trust relationship can often be one that is harmful to the beneficiaries. We have all heard of the term “trust fund babies”. to avoid creating such a negative scenario, it is critical that the parties to the trustee beneficiary relationship are properly educated as to the roles that the relationship involves. How can you possibly have a good relationship if the parties involved do not know the roles the relationship is based on?
A simple starting point in this area is to include discussion of the terms of the family trust structures as an agenda item at family meetings. this can be done in age appropriate ways.
Authors Hartley Goldstone and Kathy Wiseman in their book ‘trustworthy’, believe that one of the best ways to encourage positive trustee and beneficiary relationships is to show
families stories of times when these kinds of relationships have been at their best.
For a family to be successful for at least five generations, they have to develop a system for making slightly more good decisions together over the long term, than bad ones. If the mission of the Fo is to help the family to preserve its wealth for generations, then the question is how can the Fo assist the family members to make the best decisions that they can? Another critical element of the education curriculum is ensuring that family members are developing the skills to be effective joint decision makers.
Joint decision MakingFamily wealth expert James E. Hughes Jr. in his book, ‘Family;
the Compact among Generations’, recommends that four specific issues should be addressed for each family member in order to help them fully participate in their family’s joint decision making system. First, they need to know how as individuals they learn and take in information. second, they need to know what is own unique calling in life. third, they need to know their individual work style; i.e. how they prefer to work in a group. Fourth, they need to know their own personality type. Hughes’ book, which is another essential addition to the family office library, can be referred to for more detailed information on how to approach each of these four steps. Finally, as a fifth task, Hughes recommends that
each family member must be taught the skills of having difficult conversations.
Family education is a topic that many Fos in Asia know is a critical issue but perhaps they are not sure where to start. A recent survey of over 35 family offices in the Asia Pacific showed that none of the Fos surveyed had an education committee; but that 28% of them were thinking of having one. By addressing each of the above areas in a family education curriculum, a family education committee will be ready to go to work.
Ownershipliquidity, capital allocation
assurng succession strategic direction performance, etc
BusinessOperations, finance,
employees, supplier and customer relationships,
etc
FamilyHealth, prosperity,
continuity, participation, community role,
communication, education, values, goals, etc
the three-Circle Model
Source: Christian Stewart; Gary E. Aronoff and John L. Ward
assurng succession strategic direction performance, etc
BusinessOperations, finance,
employees, supplier and customer relationships,
etc
FamilyHealth, prosperity,
continuity, participation, community role,
communication, education, values, goals, etc
the three-Circle Model
Source: Christian Stewart; Gary E. Aronoff and John L. Ward
NOVEMBER 2014
30 Family oFFICeS
Coping With Change 應對轉變帶來的影響
Attendees at WealthAsia’s event ‘The Sustainable Family Office Forum’ were given a rare opportunity to listen to the personal observations of local fund manager Martin Lau. He is the subject of this month’s Meet The Manager interview.
integrating environmental, social and governance (EsG) factors into all of our investment and ownership practices.”
EsG issues are considered in the same manner as traditional financial issues in terms of their capacity to affect long-term investment performance. Lau adds, “We are active stewards of our clients’ capital, and an important part of all our teams’ investment process is active engagement with companies on their EsG performance, practices, risks and opportunities. Each of our investment teams also has access to value-adding EsG data, research and resources to help them make the best possible investment decisions.”
Lau defines their investment approach as absolute return, by which he means that risk is assessed as losing money for the investing client, rather than in terms of deviation from any benchmark index. “We focus as much on the potential
Martin is an award-winning fund manager with First state stewart and an advocate for stronger stewardship of investors’ assets. He spoke about his
team’s distinctive investment culture and the emphasis placed on the alignment of investors’ interests.
In total, First state manages $35.7 billion of Asia Pacific equity strategies. the Asia Pacific/China equity team that Martin leads consists of 18 investment professionals, based in Edinburgh, Hong Kong and singapore. since the launch of the team’s first strategy in 1988, sustainable investment has always been an integral part of the team’s investment philosophy and stock-picking process. At the heart of this philosophy is the principle of stewardship.
Lau explains, “We are committed to being a global leader in responsible investment. to achieve this, we focus on
www.FundAsia.net
31BEnchMark CoNveRSAtIoN
downside of our investment decisions as on the anticipated upside.”
Being a portfolio management veteran, Martin has lived through several market cycles in Asia and understands very well just how far the local markets have come from the heady days of the emerging markets boom (and bust) in the 1990s. He says, “the Emerging Markets ride has not always been the smoothest one. the post-tiananmen square crash, the Asian Financial, Mexican tequila and Russian Rouble crises come to mind, but there have been many other ups and downs.”
so what has he learnt from these significant events? “First, on the investment front, a rapidly growing economy does not always make for a good stock market.” this point is easy to prove by comparing the staggering economic performance of China over the last 20 years with that of the country’s A-share market. “But, if you bought good quality companies you could still have made reasonable returns,” says Lau. second, that markets are extremely inefficient over the short term, and if you stick to your guns on valuation as well as quality, you should not find it difficult to beat any relevant benchmark as well as producing decent absolute returns over the longer term; “seven years is a reasonable period over which to judge a fund manager!” says Lau. Finally, that the best long-term investment opportunities are most likely to be found with family-controlled companies prepared to empower professional management and cognisant of the need to look after all stakeholders, not only their own personal interests.
First state stewart aims to recruit and develop people who are passionate about investing but hate losing clients’ money. All team members have to sign a Financial Hippocratic oath for Asset Managers, which focusses not only on ethical considerations but also on the importance and intrinsic value of the work itself.
“We engage on a wide range of issues including strategy, governance, alignment of interests and reputation. Engagement issues are identified through the research process and through alerts received from RepRisk. ” say Lau.
Martin has a number of investment themes he is following in China:
Living Standards – “the government’s stated GDP growth target is largely irrelevant to our investment process; quality and sustainability of growth are more important. China is by no means a rich country and much remains to be done to raise living standards. Investment in education, healthcare and infrastructure, especially in rural areas, still has a long way to go. With the right mind-set and political will, China’s progress towards higher living standards should
drive better quality, more sustainable GDP growth. there are signs that the current leadership is committed to carrying out the necessary reforms.”
Pollution – “Air pollution remains a big challenge for China. tourists are offered protective face masks by their hotels and ‘smog insurance’ is available from some travel agencies. there are signs emerging that it could start to have a detrimental impact on economic development – on a recent trip we heard stories of companies moving offices out of Beijing, where pollution is especially bad. Hence there is a danger it could hinder China’s efforts to attract and retain the best talent. Among the most recent measures announced by the government to address the issue was a change in the law to give greater powers to the country’s environmental protection agencies.”
Market liberalisation – “the slowdown in China is likely to continue, although the economy may stabilise in the short term. the fact that the government has not launched a major stimulus package so far shows that they are determined to push ahead with necessary adjustments to the economic structure and dealing with industry overcapacity. there are likely to be more selective measures to help promote sustainable development in the areas of environment, product upgrading and the livelihood of the general public. there should also be new growth opportunities arising from the opening of sectors controlled by state companies.
“We believe that there are good-quality companies in the China A-share market that are trading at attractive valuations especially with a longer-term view. the reform efforts relating to the China A-share market, more market-based competition and new incentives for state-owned-enterprise employees should be beneficial for long-term investing. We continue to focus on identifying companies with sustainable competences, proven management and healthy financials.”
Corporate landscape – “the corporate landscape has plenty of scope for improvement in terms of efficiency, accountability and product quality – certain sectors are dominated by large and monopolistic state-owned enterprises, while others are fragmented and lacking pricing power.
“As growth slows there will be an opportunity for more solid business foundations to be laid. Management prudence, cash flows and balance sheet strength will be extremely important in the coming years. those companies which can achieve innovation and ‘product premiumisation’ should be highly successful. While we remain broadly conservatively positioned, we will look to find the best companies in the fast-growing sectors.
NOVEMBER 2014
32 BEnchMark CoNveRSAtIoN
www.FundAsia.net
33BEnchMark CoNveRSAtIoN
WealthAsia活動「可持續發展家族辦公室論壇」的出席者得到千載難逢的機會,聽取本地基金
經理Martin Lau的個人見解。他是本月「與基金經理對話」訪問的受訪者。
Martin是首域投資 (First state stewart)獲獎無數的基金經理。他提倡對投資者的資產作出
“A sustainable business means offering the very best service, ambience and attention to detail and cuisine.”
Two of Hong Kong’s local leaders in fine dining culture - both of whom are owner-operators of their own restaurants and personal brands, share their thoughts about what it takes to succeed as an investor and operator in one of the world’s most competitive markets.
Fiine dining has never been so luxurious and glamorous in Hong Kong. that is why it has become one of the hottest investments for high net worth individuals. the
amount of investment, passion and skill needed to create a luxury dining experience has made it an adventurous business.
Being an owner of a classy eatery is a prestigious and visible status symbol, but those are the wrong investment reasons. “Everybody wants to own a fine dining restaurant, especially if it is not their main business,” says Harlan Goldstein, the owner of Gold, Comfort, sushi to and Penthouse. “All over the world it represents a
form of bragging right. today, a luxury restaurant requires an investment of about HK$14 million.”
Harlan believes that Hong Kong diners like to interact with their chefs. “there aren’t many true celebrity chefs in Hong
Kong. Unlike other franchised names who occasionally visit, I have made a commitment to cultivate and care for a loyal, local clientele over the last 10 years.”
But while Hong Kong’s luxury dining sector is booming,
Goldstein has words of warning for casual investors. “not everyone can survive and prosper. over-expansion and mediocre quality are the main causes of failure. A casual management style will leave you wondering why you don’t have a well-trained kitchen or staff. A successful operation requires plenty of talent in the kitchen, customer relations and retention, design and brand development. Without this you will surely fail.”
Associating your name and personality with a restaurant distinguishes it from everyone else. However, it brings its own set of risks. Bonnae Gokson, the owner behind sEVVA, is a veteran of the fine dining scene. “Having my name associated with sEVVA as a brand requires serious commitment. the challenges are immense. Everything from staff attitude, attire and cleanliness- down to the tiniest details, reflect upon our image. Constant training and pep talks are needed to remind the staff. It’s like running a large estate.” Harlen Goldstein
The Risks & Rewards
in Fine Dining 高級餐飲業的風險和回報
132%
NOVEMBER 2014
34 Lifestyle INveStING34
“Rents are not always high, they are too high for the wrong tenants.”
Creating and sustaining successowner-operators also bring a passion to the business model that can’t be found elsewhere. “I work very differently from other dining groups, which are based on concepts or celebrity chefs,” says Bonnae. “I treat sEVVA as my second home constantly innovating and designing new pop-up interiors to refresh the decor.”
Harlan emphasises, “there are many hidden elements behind this business. You need to be good at many things or else you end up closing a restaurant in six to eight months and wondering what happened. I run four venues and each of them requires passion, energy, love and encouragement. this is what I was born to do, a way of life for me.”
High rents and ridiculous rent increases are a hazard facing every retail outlet in Hong Kong. so how do you protect your investment? Harlan takes a dispassionate, businesslike view. “Rents are not always high, they are too high for the wrong tenants. But after many years in the business landlords approach and work with me to achieve a reasonable setup. I have no problems rejecting an unreasonable rent proposal. And I don’t need prime locations anymore because customers seek me out now.”
Bonnae doesn’t deny that sEVVA’s six year old, high profile location presents particular challenges. “sEVVA occupies a prime site on the penthouse floor of an iconic building. A sustainable business means offering the very best service, ambience and attention to detail and cuisine. so we regularly scrutinize each component of our costs.”
Fine dining trends have changed so much over the years that it has actually become more democratized and accessible. A wider, younger crowd seeks a warm kind of luxury rather than a stiff atmosphere. social media platforms have also become an important medium for engaging these customers.
“Do not over-expand and compromise on quality,” warns Harlan. Customers need to be kept happy. they directly Facebook me or use Weibo or Whatsapp to make bookings or directly communicate with me. I adapted to social media in order to maintain a regular dialogue with customers. the medium allows you to be transparent and back up your reputation. today, social media is a necessary tool for chefs to promote themselves and their dining brands.”
Bonnae is careful to distinguish between dining fads versus genuine trends. “social media is everywhere and sometimes, it’s a lot of hype. Many so-called food bloggers don’t even
know ‘real food’. Many diners are just followers of what is trendy and hip for the moment.”
Harlan points out, “today’s customers want a formal, but hip and cool dining experience that is at the same time relaxed- casual dining that blends easily into luxury. today’s dining experience needs to cross boundaries.”
Finding Investors and Chasing Profits no industry wide data exists to verify profitability, but one manager said he saw luxury restaurants achieving as much as 18% profit margins seven years ago. today, 10% seems to be the normal level. Harlan reveals that, “Margins are down and you can only charge so much.”
“sEVVA hasn’t increased prices for most dishes for years, says Bonnae. “so after running for six years we can attract new guests and retain regular customers from all walks of life.”
Harlan reflects upon his Michelin award: “Winning a Michelin star isn’t as prestigious as it used to be. It creates incredible stress in order to stay in the rankings and its value for creating future business is questionable.”
the entire idea of what constitutes wealthy clientele has changed. “today, my clientele comprises more middle class Hong Kong diners, which reflects economic changes. that means keeping the average cost of a meal to about HKD700 per person.” Harlan boldly asserts, “I actually don’t want a clientele comprised of too many rich people who are too demanding. I want real fans and foodies. You can’t survive by only serving tycoons although I am always ready to please them.”
Finding the right financial backers is crucial for success. the term ‘silent’ partners is often used, but the relationship is better described as placing absolute trust in the operator’s expertise. Harlan says, “My partners are invaluable because they give me the freedom to run the business. If you team up with unqualified partners the venture can become a disaster. I don’t like a multitude of partners. It creates too much interference. silent investors are easier to work with.”
But ultimately, long term success is determined by how customers feel about their dining experience. Great food and a warm atmosphere ensures return customers. Word of mouth is the most powerful business generator. the starting point is a desire to take care of customers, not to exploit them.
Addressing environmental, social and governance concerns in the context of emerging countries, is a big problem for investors. Martina MacPherson explains the background.
one of the most compelling economic stories of the 21st century has been the increase
in size and influence of the so-called ‘emerging markets’, many of which are located here in Asia. Emerging markets have overtaken developed markets in terms of gross domestic product, measured as purchasing power, making up more than 50% of global GDP. this is forecast to grow to nearly 60% by 2020, by which time the emerging economies will account for over 85% of the world’s population.
this new-found economic power is rapidly being converted into wealth. Emerging market nations now own 70% of the world’s currency reserves. As a consequence of this shift, developed-world investors are increasingly keen to allocate more funds to emerging markets. According to an investor survey by the research house EIRIs, these funds are seeking to minimise risks and drive performance by looking at the EsG (environmental, social and governance) standards of potential investments.
sustainable investing, understood as the incorporation of EsG analysis into investment decision-making, is a growing discipline that offers opportunities for long-term value creation both for investors and society as a whole. In recent years, an increasing number of industry experts and academics across the globe have come to believe that key EsG developments can have a significant role to play in long-term performance.
the Global sustainable Investment Alliance (GsIA) reports that more than one-fifth of the World’s assets today are managed in line with EsG criteria while the Un-backed Principles of Responsible Investments (PRI) currently have 1290 signatory corporations and investment companies who commit to abide by its EsG investment criteria (see the sept edition of Benchmark for more on the PRI).
Emerging market asset managers, keen to utilise EsG analysis and integrated sustainability-led investment strategies, often face significant information problems as well as historical and cultural differences. Corporate corruption in emerging markets is less frequently reported in the public domain than in developed markets, due to less scrutiny from government, nGos and the media. this information gap leaves investors unaware of, and exposed to, the risks associated with bribery and corruption.
Direct engagement with companies can be very useful in overcoming
information gaps. Alliances with local investors, the use of local language, and awareness of cultural differences are important factors in making such engagement successful. Combining company-specific information with an analysis of EsG risks at country and industry levels can provide investors with meaningful insight.
the EsG risks faced by companies within emerging markets vary greatly from country to country. A study by sustainalytics looked at Brazil, Russia, India, China and south Africa (the BRICs countries) and noted differences in the development of regulations and the level of EsG integration into business operations. Although issues such as labour conditions, pollution and corruption are prevalent in all BRICs countries, each one is faced with unique challenges of which investors should be aware. In Brazil, for example, deforestation and relations with indigenous people are key concerns. In Russia, complicated governance structures that discourage influence from foreign investors pose the greatest risk. In China, product quality and
safety is of primary concern, and in India and south Africa depleting water resources are a key risk to many industries.
Meanwhile, certain EsG macro themes such as climate change, globalisation and transforming societal expectations for corporations have become mainstream across markets. Climate change has been widely recognised as a key systemic risk. Recent events including the 2014 Un Climate summit in new York hosted by Ban Ki-Moon and the “PRI in Person - Montréal Carbon Pledge” conference, have outlined the climate change related threats posed to the global economy, as well as the financial costs of not addressing it.
Investors with exposure to emerging markets should demand greater EsG research, analysis and ratings of emerging market companies and countries by sustainability experts such as oekom research - either to adopt their investment strategy or to comply with their governance policy – instead of waiting for appropriate regulation to appear in the years ahead.