Winners rationale

For discretionary portfolio management (DPM), 2021 proved to be the year these strategies came of age among Asia-Pacific’s private banks.

Penetration rates, both in terms of client base and AUM, rose sharply across the region among the major industry players during the year as volatility in markets such as China led clients to realise the importance of more systematic and disciplined investment, reducing some of their DIY portfolios in favour of managed solutions.

Nowhere was this more the case than at UBS, with the Swiss universal bank benefiting from a wave of inflows into its DPM strategies in the region, backed by robust performance of its mandates and continuous innovation.

Among the enhancements made to UBS’s DPM offering in 2021 were an increase in sustainable investments exposure in its traditional offering from 5% to about a third of globally diversified portfolios. In another move to boost its sustainability offerings, the bank launched an emerging markets sustainable finance strategy that uses fixed income solutions to assist in bridging funding gaps in the developing world and contributing to the UN’s Sustainable Development Goals, a strategy launched in partnership with currency manager Record.

These innovations would have mattered little if UBS’s mandates had failed to deliver robust returns to clients. However, return data provided by the bank showed that global multi-asset, global equity and global fixed income discretionary mandates all generated meaningful alpha during 2021, topping corresponding numbers provided by others in the market. Performance last year was boosted by profitable tactical calls, including an overweight for global energy to capitalise on easing travel restrictions and a long NZD-EUR position on an anticipated divergence in interest rates. Such calls get seamlessly integrated into clients’ discretionary mandates.

The Swiss bank’s DPM offering happens to be supported by the most intuitive and innovative digital platform in the market. Launched in 2020, UBS [My Way] offers clients more than 50 investment ‘building blocks’ to craft their portfolio, ranging from US equities, to hedge funds, to ESG themes. Clients, if they so choose, can construct their personalised DPM strategy in a matter of minutes. While most prefer the guidance of their client advisors to build their My Way portfolios, the platform comes with a smart digital interface that hints at the future of portfolio construction.

Ultimately, the proof of the pudding is in the eating when it comes to the performance of UBS’s DPM business in the region. Comparing figures shared with Asian Private Banker for 2021 versus the prior year, UBS saw a significant rise in DPM penetration both in AUM and number of clients accounts, supporting a large increase in assets held in these strategies in the region.

That is why UBS is the winner of Asian Private Banker’s Best Private Bank – Discretionary Portfolio Management award for 2021.