DBS Private Bank, on March 16, announced that it has collectively raised over $1.6 billion in assets under management (AUM) through two of its flagship product innovations, the DBS Chief Investment Office (CIO) Barbell Income Fund and the MSCI EM Asia ESG Leaders Outperformance Trade (ESG Outperformance Trade).
The Barbell Income Fund, which was launched in February, drew some $970 million in less than six weeks, while the ESG Outperformance Trade raised over $690 million, a seven-fold surge from its original launch in 2018.
The sums raised achieved new highs in their respective fields, according to the bank.
The Barbell Income Fund is DBS’s latest addition to its stable of investment products that reference the DBS CIO Barbell Strategy Portfolio. The portfolio is unique to DBS as it mirrors the CIO’s high-conviction investment calls.
The portfolio, as at March 10, has seen a performance of 26% net of fees, outperforming the composite benchmark by close to 7%.
It was launched to address its clients’ need for income amid a lower-for-longer interest environment. It is a multi-asset fund that has 50% equities, 45% fixed income and 5% cash aimed to distribute 3% to 4% per year to its investors via quarterly distribution.
The $970 million raised under the Barbell Income Fund brings the total volume of discretionary assets under management (AUM) referencing the portfolio to a new high of around $4 billion.
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“We can expect rates to stay at ultra-low levels in the foreseeable future as a result of structural changes in global demographics, and the trend towards digitalisation. In this new normal, investors cannot rely on a traditional portfolio strategy that utilises bonds only – a more robust multi-asset strategy is better positioned to enhance portfolio yield, with covered calls serving as an added income stream. We’re heartened by our clients’ warm reception to the Barbell Income Fund, which suggests that they are cognisant of the situation, and trust us to navigate them through it,” says Hou Wey Fook, chief investment officer at DBS Bank.
The ESG Outperformance Trade is a three-year outperformance warrant that is designed to demonstrate that investing based on ESG principles improves portfolio risk-return characteristics and generates superior returns in the long-term.
The current tranche was rolled out in October 2020 following the success of the first ESG Outperformance Trade which was launched in 2018.
“The strong take-up of our ESG Outperformance Trade was a pleasant surprise. While we did expect to see a jump in participation versus 2018’s, the final level of interest was unprecedented and exceeded our expectations. Our confidence in this trade was bolstered by the outperformance of the 2018 Trade, which supported our investment thesis that ESG-compliant companies do outperform in the long run; in addition, it also shows that our ongoing efforts in engaging and empowering clients to invest with an ESG lens is paying off. ESG is a key focus for DBS Private Bank, and we remain committed to spearheading its growth in Asia,” says Joseph Poon, group head of DBS Private Bank.
As at 10.03am, shares in DBS are trading 2 cents higher or 0.07% up at $27.98.
