Winners rationale

Many countries started 2021 with a strong recovery and moved into mid-cycle transition. Morgan Stanley Private Wealth Management Asia took advantage of its renowned research resources to identify opportunities in the anticipated market correction, offering best-in-class fund advisory services, combining a global vision with a deep understanding of Asian UHNWs’ preferences.

Morgan Stanley PWM Asia made multiple right calls in 2021, including the early preference towards European equities and sectors that offer a hedge against inflation, as well as moving up the quality curve in investments to achieve better risk-adjusted returns. Multiple equity funds that were recommended based on these views had been up over 20% YoY as of early November 2021.

Besides the ability to seek alpha in volatility, risk management was key to fund advisory in 2021. Morgan Stanley PWM Asia recommended that investors be selective in credit. In its annual review, the fund advisory team made changes to the funds on its focus list, removing a fund that invested a considerable portion in assets with default risks and replacing that with a similar themed fund with a more prudent administration and investment portfolio, thus avoiding major devaluation risks.

As COVID-19 led people to rethink their life goals, more Asian clients were inspired to create positive environmental and social impact via investments, believing that companies with better environmental, social and governance integration can outperform non-ESG funds during and after a crisis. As such views aligned with Morgan Stanley research, the firm significantly expanded its ESG platform to provide a full suite of ESG and sustainable offerings in 2021, ranging from thematic investments to active impact investing funds.
Consequently, the substantial flows into two ESG funds represented a meaningful inflow amongst the overall NNM inflow.

The above factors contributed to a solid business performance in 2021: Morgan Stanley PWM Asia net inflows into fund investments were 2.8 times larger than the previous year, with over 10% invested in ESG funds. The firm achieved an impressive penetration rate by the end of October 2021, with 89% of PB clients buying funds through the fund advisory team, compared to 51%, an already decent figure, two years ago.

Morgan Stanley Private Wealth Management Asia is Asian Private Banker’s Best Private Bank – Fund Advisory for 2021.