Winners rationale

In what was a remarkable year for financial markets, BNP Paribas Wealth Management’s Discretionary Portfolio Management (DPM) team generated significant outperformance for its clients, building on its already solid track record, supported by strong inflows of AUM.

Its equity mandates in particular shone brightly. The core Global Thematic Equity Mandate outperformed MSCI AC World by more than 10% for the year, ranking in the 95th percentile vs. the peer group of global equity mutual funds. Its satellite Global Technology mandate, with a return for the year of 63%, generated even more alpha, outperforming both the Nasdaq Composite and MSCI AC World Global Technology by almost 20%. On the Fixed Income side, performances were strong too, with lower drawdowns in March than most bond funds, and attractive returns over the full year across the full range of bond mandates.

These strong results were generated by the experienced 15-person regional DPM team in Hong Kong and Singapore. Although drawing on the strength of a global network of investment specialists, the local DPM team retains full autonomy over instrument selection, and with over 90% of AUM invested through stocks and bonds rather than funds, the investment philosophies and processes driving each strategy are rigorously developed and robustly followed. This disciplined and proactive approach has allowed the team to build an enviable track record over many years — and this continued in 2020.

However, outperformance is only captured by clients who stay invested, and this was especially true last year. It was crucially important that BNP Paribas Wealth Management’s DPM team was able to stay close to clients during the 2020 bear market, and to remind and continually educate clients that a strategic asset allocation approach with a long time horizon is the surest way of compounding attractive returns. The DPM team continued to provide detailed, transparent monthly portfolio updates and market flashes, providing clients with additional comfort that portfolios were being carefully managed.

This combination of strong absolute and relative performance with regular, clear communication to clients, translated into remarkable asset growth. BNP Paribas’s DPM assets grew by more than 25% in 2020, with the penetration rate climbing by 2 points. As has been the case for many years, a significant portion of inflows were top-ups from existing DPM clients.

BNP Paribas Wealth Management’s ongoing focus on innovation was also seen in its DPM offering. In collaboration with the Structured Product team, DPM launched the Global Thematic Actively Managed Certificate (AMC) in 2020, launching it close to the market bottom in April.

The DPM team continued to reflect the BNP Paribas Group’s strong focus on sustainability, integrating ESG into its offering of DPM mandates, with the average sustainability rating increasing across mandates.

BNP Paribas Wealth Management is Asian Private Banker’s Best Private Bank – Discretionary Portfolio Management for 2020.