In this edition of ‘Kopi-Gao: Outperforming Markets with Top Fund Managers’, we speak to Robin Chay, Senior Portfolio Manager in the Discretionary Portfolio Management (DPM) Team at DBS. 

Robin joined the finance industry in 1997 as an analyst with UOB Asset Management, where he covered and managed global equities and mixed asset portfolios. Prior to joining DBS in 2016, he was with Bank of Singapore for eight years as lead manager for the mixed-asset and global equities portfolios in the DPM team. Robin holds a Master-in-Civil and Environment Engineering from Imperial College, London.

Interview with Robin Chay, Senior Portfolio Manager in the Discretionary Portfolio Management (DPM) Team at DBS

Can you share more about the DBS investment team?

Our team consists of about 113 members, including our Discretionary Portfolio Management (DPM) team with five managers. The Chief Investment Office (CIO) team, part of our private banking and wealth management division, collaborates closely with the bank’s economics team and desk analysts in our strategy group.

Together, we pool our expertise to ensure robust investment strategies. Our fund managers have an average of 25-37 years of experience, while our CIO team members also bring around 18 years of experience each. This blend of seasoned professionals and younger talent ensures a dynamic and knowledgeable team.

Whether it’s from your role at DBS or your personal investment strategy, what practical steps should one take to stay on the right track?

It’s crucial to take practical steps to ensure you are on the right financial track. Start by comprehensively reviewing your finances to understand your current standing.

We recommend following four key money habits: Save, Protect, Grow, and Retire. These provide a holistic approach to personal finance. 

Before you invest:

• Ensure that you have set aside at least 3 to 6 months of emergency cash 
• Have sufficient coverage to protect against large medical bills and loss of income

When you are ready to invest: 

• Investing regularly even in small sums, to benefit from compounding
• Diversify your investments across various asset classes, including equities, bonds and insurance plans
• Over time, a good guideline can be investing at least 10% of take-home pay and having at least 50% of your net worth invested

For more insights, read: 4 DBS Financial habits: From 1st Paycheck to Retirement

What is DBS Chief Investment Office (CIO)’s general investing philosophy?

At DBS, our investment approach balances income and growth, tailored to the market cycle.

For income, we focus primarily on bonds, favouring investment-grade securities to manage risk. We also consider income-generating equities.

For growth, our DNA leans towards sectors like technology, internet companies, e-commerce, and consumer industries. We adjust our emphasis based on market conditions—tilting towards capital gains when growth prospects are strong and the monetary environment is supportive.

Both our income and growth strategies are regularly reviewed in our strategic meetings to ensure they remain relevant and effective.

What do you think makes a good investment portfolio for retirement?

A good investment portfolio for retirement should focus on three key factors: diversification, income generation, and active management.

• Diversification: Spread investments across regions, sectors, and asset classes to manage risk effectively.
• Income Generation: Include assets that can generate a steady income, such as investment-grade bonds and large-cap stocks.
• Active Management: Regularly review and rebalance the portfolio to adapt to changing market conditions.

By incorporating these elements, you enhance your chances of achieving a successful retirement portfolio.

If I’m 40 years old and plan to retire at 65, how would the DBS team approach my retirement portfolio?

With a long investment horizon of 25 years, you can actively participate in equity markets to grow your wealth. This time frame allows you to recover from market downturns and ride out volatility.

As you get closer to retirement, it’s crucial to adjust your portfolio annually. Gradually shift your allocation from growth-focused equities to more stable fixed-income assets. This de-risks your portfolio, helping you conserve wealth as you approach retirement.

This approach helps to balance growth potential with stability no matter what age you are at. At DBS, this is done for you automatically via Retirement digiPortfolio.

Why is it important to constantly review your portfolio at different life stages?

Our lives evolve due to various factors, making it essential to review your portfolio regularly:

• Early Career: With less disposable income, focus on short-term goals like saving and getting sufficient protection coverage.
• Career Growth: Higher salaries mean more disposable income to invest. This stage often involves significant life milestones such as buying a house or having children.

Regular portfolio reviews ensure disciplined wealth management and optimize investments for retirement goals. It’s recommended to review your portfolio yearly, perhaps on your birthday or at the end of each year.

For more insights, read: Investing according to your changing life stages | DBS Singapore

How did this idea of a retirement portfolio come about?

We’ve long been involved in distributing financial products, and through our experience, we noticed that the retirement space was not comprehensively covered. Many wealth management solutions claim to aid in retirement planning but aren’t specifically tailored for it.

About three years ago, we began discussions to create this dedicated retirement solution serving to run in parallel with retirement schemes like CPF through both accumulation and decumulation phases. The process took time, partly due to the COVID-19 pandemic. 

Our solution is unique because it offers a comprehensive journey from A to Z. It follows clients from their 30s through to retirement, automatically adjusting the investment strategy as they age. This guided, curated system simplifies the process for investors, providing a logical and structured framework.

Many other retirement funds focus on specific goals like income but don’t offer this seamless, long-term approach. JPMorgan’s expertise allows us to create a system that adapts from the beginning of the investment journey to the end, catering to different age groups effectively.

How is the Retirement digiPortfolio able to take the glide path approach without needing typical information such as current savings and expected retirement spending?

DBS has been active with the Plan on digibank and related tools for about three years. The retirement projection tool within the Plan on digibank aggregates all assets, including investments, savings, and government schemes like CPF. This tool simplifies complex projections, allowing us to provide a comprehensive income projection at retirement.

By integrating CPF balances and other assets, we highlight any retirement income gaps. If a gap is identified, we might suggest solutions like the Retirement digiPortfolio. When a customer starts with the retirement projection tool, we show them their expected asset balance at retirement based on their inputs. If there’s a projected gap, they can consider the Retirement digiPortfolio, where we provide an estimate of potential returns based on their investment amount and retirement age.

This isn’t a one-time projection; it’s an ongoing process. As customers adjust their investments or make additional contributions, the projections are updated to reflect these changes, ensuring continuous alignment with their retirement goals.

Beyond diversification, what are the safeguards around risk management within the whole portfolio?

Strategic Asset Allocation (SAA) is a key component of our risk management strategy. SAA involves investing in proven asset classes with long-term histories, such as equities and bonds. This approach ensures stability and reliability.

While gold is also part of our portfolio for its diversification benefits, it doesn’t generate income. To address this, we include other income-generating assets alongside growth-focused ones.

In the realm of alternative investments, hedge funds can be beneficial due to their lower correlation with traditional asset classes. However, our primary focus remains on equities, bonds, and gold, ensuring a balanced and diversified portfolio without over-reliance on alternatives.

How does active management align with your investment philosophy, especially for a retirement portfolio?

Our investment principles are rooted in fundamentals and a long-term view. While we do take an active approach, it’s not about frequent trading. For instance, with China, despite its challenges, we recognise its long-term attractiveness. We manage our portfolios actively to balance risk and enhance returns but do so thoughtfully and strategically.

Active management means being engaged and responsive, not hands-off. We make adjustments when necessary to manage risks or capitalise on opportunities, ensuring that our clients’ retirement portfolios remain robust and aligned with their long-term goals.

If an average consumer is too busy with day-to-day work to review their portfolio regularly, what should they do?

Broad-based guidelines can help you manage your investments even with a busy schedule. Here are some key tips from DBS Money Habits:

1. Invest Over Time & Diversify: Diversify your portfolio across fixed income, funds, equities, and more. Choose reliable partners like DBS, which collaborates with J.P. Morgan Asset Management to provide top-tier solutions.
2. Stay Disciplined: Invest regularly to benefit from compounding. A regular savings plan (RSP) can be a simple way to invest a small amount each month and stick to your plan.

For more personalised help, speak to a DBS Wealth Planning Manager (WPM). They can:

• Understand your short-term and long-term financial goals, risk tolerance, and investment preferences.
• Develop a tailored wealth plan, including investment strategy, tax planning, and estate planning.
• Provide ongoing advice and support, adjusting your plan as your financial situation changes.

What is one tip you would share on how they should plan and invest for their retirement?

The key is discipline and objectivity. During market corrections, it’s natural to worry about the impact on your retirement. However, if you’re 40 and planning to retire at 65, a correction at age 45 is just a part of the long-term journey. Instead of panicking, consider it an opportunity to capitalise on lower prices and dollar cost average.

Regularly reviewing your portfolio is also crucial. Many know this but don’t practice it. Staying disciplined and objective can significantly enhance your retirement planning and investment outcomes.

If you are looking for a simple and hassle-free way to achieve your retirement goals, the DBS Retirement digiPortfolio helps to adjust your portfolio allocation based on your own timeline to retirement. Learn more about the DBS Retirement digiPortfolio here. 

About kopi-Gao: Generating Alpha with Top Fund Managers

Kopi-Gao is regular column by Beansprout that features conversations with professional fund managers, offering a rare glimpse into the strategic thinking and personal philosophies that drive the world of investment. These interviews are aimed at providing insights and actionable knowledge for individuals looking to understand the art and science of successful fund management in today’s ever-evolving financial landscape.

Disclaimers and Important Notice

This article is for general information only and should not be relied upon as financial advice. Any views, opinions or recommendation expressed in this article does not take into account the specific investment objectives, financial situation or particular needs of any particular person. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

The information and opinions contained in this article has been obtained from sources believed to be reliable, but DBS makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose.

All investments come with risks and you can lose money on your investment. Invest only if you understand and can monitor your investment. Diversify your investments and avoid investing a large portion of your money in a single product issuer.

A prospectus and Product Highlights Sheet for the funds used in digiPortfolio may be obtained from any DBS/ POSB branch.

You should read the prospectus or profile statement and Product Highlights Sheet before deciding to subscribe for or purchase units in the scheme.

The value of the units in the scheme and the income accruing to the units, if any, may rise as well as fall.

Any prediction, projection or forecast is not necessarily indicative of future or likely performance of the scheme.

This article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation.

It is provided in Singapore in collaboration with DBS Bank Ltd (Company Registration. No.: 196800306E), an Exempt Financial Adviser as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore.