Best Singapore Equity Fund House: Winner

Question: What is your outlook for 2021 specific to the markets you cover, and how are you positioned to take advantage of opportunities and/or mitigate potential risks?

Answer: Markets started 2021 on a positive note, continuing the rally from Q4 2020. This was possibly driven by liquidity and positive sentiments about the vaccine rollout and continued economic recovery. Vaccines should receive approval for emergency use in most parts of Asia by first quarter of the year while wider distribution should begin from Q2 or H2 this year.

In 2020, despite the big challenge from COVID-19, equity markets did well, driven by companies that benefitted from the changes brought about by the pandemic. Active funds and investors that took advantages of these winners and avoided the losers did especially well.

We think 2021 will likely have its fair share of changes and challenges but the big changes happening in Asia will create winners and losers and investors can benefit by investing in active strategies that try to identify the winners.

In 2020, there were the COVID beneficiaries - the move to online and technology. Trade and technology disputes also created winners and losers. Clean energy trends emerged as more countries, notably China, committed to Net Zero Carbon Emissions, leading to winners such as electric vehicles (EVs) and battery makers. In 2021, some of these trends will continue, for example, digital transformation and adoption of 5G. Several of the key beneficiaries will be Asian tech companies.  However economic recovery plays should also benefit. For example, we see value in some Financials in Asia, which had lost value due to Covid concerns but are rebounding on expectations of a recovery.

In our portfolios, we own companies that benefitted from trends accelerated by COVID-19 and also those that were challenged in the short-term (e.g. banks, refiners, petrochemicals) but might benefit from a cyclical recovery when COVID-19 concerns fade. We have selectively added to our cyclical exposure to capture a potential recovery over the last few months. Finally we believe our predominant exposure on long term, domestic themes could help to cushion our portfolio from external tensions. These areas include the increasing share of discretionary spending and premiumization, China’s rebalancing into services and consumption, increasing spending on R&D and technology leading to innovations and, under-penetration of credit across many Asian markets

Question: What do you think are the success factors in your corporate culture that enables your firm to consistently deliver for investors?

Answer: Our strategy and culture at UBS are underpinned by our three keys to success: our Pillars, Principles and Behaviours. These keys are the foundation for how we manage our workforce, how we work with our stakeholders and each other, and how we make business decisions and deliver on our strategy.

Question: What are your future business plans, such as the launch of new products or geographical expansion?

Answer: Sustainable and Impact Investing remains a key area, as clients increasingly seek solutions that combine their investment goals with sustainability objectives. We do this through product and service innovation; dedicated research; integration of environmental, social and governance factors into our investment processes, leveraging our proprietary analytics; and active corporate engagement.
 
Globally we have created active climate aware strategies in both equities and fixed income. This year we have launched a dedicated ESG-focused solution – emerging markets sustainable leaders equity, by repositioning an existing strategy. This strategy aims to invest in companies with a sustainable competitive edge that are in a prime position to deliver above average industry growth, to build a portfolio with an above average ESG profile.

Geographically, we are investing in our leading presence and products in China, both onshore and offshore, one of the fastest-growing asset management markets in the world, building on our extensive and long-standing presence in the Asia Pacific region.

Question: What is the firm’s approach towards sustainable investing? How has this been incorporated in the product range and/or investment process?

Answer: At UBS-AM, sustainable and impact investing is a strategic priority. We believe that using Environmental, Social and Governance (“ESG”) factors in the investment analysis process can improve the quality of our investment decisions.
 
All our active equities and fixed income integrate ESG factors into their investment process. Our portfolio and analyst team is supported by the Sustainable and Impact Investing team who works closely with the investment teams to help them with best practices in using ESG data (from internal and external sources).
 
In the active equities team, we integrate ESG factors through a combination of proprietary methods and tools. For companies with material ESG issues, our portfolio manager may engage with the management to address and mitigate these. 

Question: What are some of the firm’s diversity and inclusion initiatives?

Answer: At UBS, workforce diversity is a business imperative and is critical to our long-term success. In our experience, teams with diversity in factors like gender, race, age, ethnicity, education and sexual orientation better understand and relate to our equally diverse clients’ needs. Also, people from different backgrounds and experiences help us make better decisions and drive innovation.

We're committed to ensuring a diverse and inclusive workplace with equal opportunities for all employees. In addition to our strategic initiatives, we sponsor numerous activities to promote inclusivity. For instance, our 43 employee networks regularly host events focused on gender, culture, ethnicity, LGBTQ / Pride, disability, veterans, parenting, elder care and other topics.