The BOCHK All Weather ESG Multi-Asset Fund and the Blackrock Circular Economy Fund have received approval from the Securities and Futures Commission (SFC) to be offered to retail investors in the region.

For BOCHK AM, this will be the firm’s first ESG-labelled fund, the records show.

Meanwhile, the Blackrock fund was incepted in October 2019 and had assets of $1.6bn as of the end of March, according to its factsheet. It invests in global equities that benefit from or contribute to the advancement of the “circular economy” – a concept that aims to minimise waste by considering the full life-cycle of materials and redesigning products and operations to encourage greater re-use and recycling.

The fund is already available to accredited investors in Singapore, according to data from FE Fundinfo.

Both the BOCHK AM and Blackrock funds also join the growing list of approved ESG or green funds by the SFC, the regulator’s records show.

First published in December 2019, the list of ESG-approved funds includes products that meet ESG disclosure requirements aimed at countering greenwashing. The criteria include the fund’s key investment focus, ESG analysis and evaluation methodologies, and what the firm believes to be relevant “green” or ESG criteria.

Other investment products that were featured on the list this year are the Manulife Global Fund – Sustainable Asia Bond Fund and the Harvest CSI 300 ESG Leaders Index ETF.

The list now has 50 mutual funds and three exchange-traded funds (ETFs), the records show.

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AIM in Japan is registered as an investment advisory and agency business, which enables the firm to provide investment advice to its clients. This will also be AIM’s first office in Asia.

Besides London, it has offices in Melbourne and Washington.

Established in 2014, AIM is a global impact fixed income manager and manages three strategies, which are the US Liquid Impact Bond, the Single Currency Impact Bond and the Multi-Currency Impact Bond strategies.

Registration process

Launched in January, the FMEO was created by Japan’s Financial Services Agency (FSA) and local finance bureaus in a move to attract more foreign asset managers to set up in the country.

The FMEO handles pre-application consultation, registration and supervision for newly entering asset managers, and allows firms to complete the registration process in English.

“In the process of supporting AIM for its registration as an investment advisory and agency business operator, various communications, including a video conference with the company and the preparation of the registration application documents, were conducted in English,” the FSA said.

Since AIM’s registration process was completed in English, the supervision of AIM will also be conducted in English by the FMEO, the FSA added.

“We found the FMEO to be very professional, timely and thorough in their registration process.”

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Like most digital offerings, Stashaway’s mobile app enables users to invest in portfolios that are either based on their risk profiles or goals.

“You can either invest based on your risk level and we make sure the risks of your portfolio stays constant at any situation, or you can choose the goal-based investing option, which is our take on personalisation,” Stephanie Leung, Stashaway’s director and country manager for Hong Kong, told our sister publication Fund Selector Asia.

Leung joined Stashaway in the middle of last year to start building the team in Hong Kong. Currently, the team has grown to seven, mostly focusing on marketing and business development.

Stashaway makes use of US-listed ETFs, which the firm believes offers the best total expense ratio (TER) and liquidity for its customers.

“It also provides us with different choices of asset classes,” Leung said, adding that the platform has at least 30 ETFs to choose from.

Targeting the rich

Most digital or robo-advisers mostly target retail investors, as asset allocation or advisory services previously were only made available to institutions or high-net-worth individuals (HNWIs).

Stashaway also aims to liberalise advisory services in the region. While its focus is on the retail market, it also has plans for targeting HNWIs, according to Leung.

“We have coverage for high-net-worth clients, and we already have wealth advisers dedicated to the Hong Kong market,” Leung said, but did not elaborate on how many wealth advisers the firm has hired.

“For the HNW segment, we offer things that are beyond the standard offering, because our wealth advisers can have more in-depth discussions about the markets and asset allocation recommendations,” she said.

Another digital advisory platform, Kristal AI, has also targeted “emerging HNWIs” through its “private wealth” account.

Kristal AI, which operates in Hong Kong and Singapore, believes that not all wealthy individuals have access to wealth management services by private banks. An investor may have $1m in liquid assets, but not $5-$10m (£7.2m, €8.4m) to meet the minimum threshold for a wealth management account.

Access to human interaction

Stashaway’s Leung noted that while the firm’s platform has dedicated advisers for HNWIs, retail clients also have access to human interaction.

“For all our clients, they have access to our customer support team seven days a week. It is our pledge to make sure that clients, even though they are not HNW, get human interaction when needed,” she said.

“That is why we try to stay away from the word ‘robo’ because we are not entirely robo. What we are offering is an interface to manage your wealth and at the same time having human support when needed.

“Of course, we try to make our app as easy to use as possible, so people don’t have to call customer service all the time. Ultimately, the goal is to make everything efficient.”

Aggressive hiring

Stashaway has grown in size, especially since the firm has expanded into several markets.

It first launched in Singapore in 2017 and expanded into Malaysia in 2018 and the Dubai International Financial Centre in 2019.

“When I joined Stashaway last year, we only had 40-50 people, now we are 160,” Leung said.

AUM has also grown to at least $1bn in assets, she noted.

The firm has been preparing for its launch in Thailand, where Stashaway is “growing aggressively”, she added.

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Endowus claims that the digital offering is a first in Asia. It is open to all Singapore-based investors, excluding US persons.

The firm believes that Singapore’s drive towards sustainable investing is aligned with investor sentiment. An Endowus survey of 1,100 participants in Singapore shows that 93% of the respondents indicated that ESG investing resonates with them. However, only 28% of all surveyed held some form of ESG investments.

Survey findings show there are common themes that explain investors’ hesitation to fully embrace ESG funds. Fifty-eight percent of the respondents acknowledge a lack in their own understanding or knowledge of ESG investing, while 43% pointed to a lack of good available options as a key hindrance.

“The newly launched Endowus ESG portfolios are aimed at addressing these key issues while meeting growing investor interest in investing sustainably and fostering positive change – both of which also support Singapore’s national policy,” the firm said.

Launched in October 2019, Endowus is also the first and only Central Provident Fund (CPF) digital adviser. The firm aims to also include its ESG portfolios in the CPF, allowing users to invest their pension funds in sustainable investments.

Details

Endowus’s ESG portfolios are comprised of actively managed funds, three equity and three fixed income products, and make use of their institutional share classes with 100% trailer fee rebates, facilitating access to ESG products at the lowest achievable cost.

The fund managers include JP Morgan Asset Management, Natixis Investment Managers’s Mirova, Pimco, Schroders and UOB Asset Management-Robeco.

A spokesman of the firm claimed the ESG funds in the platform are unique in the region multi-fold:

• Two of the funds are not available on any other platform;
• For three of the six funds, Endowus worked with the fund manager to launch the product or a new share class previously unavailable in Singapore; and
• Endowus has exclusive fees or clean/institutional share class access for four of the six funds.

“We have implemented a robust due diligence process on the selection of funds and fund managers, so investors are provided with only the best ESG products,” Samuel Rhee, chief investment officer at Endowus, said.

When the firm assessed the ESG funds, it looked at the firm-level commitment to ESG investment and integration, as well as how the strategy is designed to incorporate and take advantage of ESG information.

“These fund managers have committed their resources to have built proprietary ESG rating systems so they could have independent ESG views and do not depend on external third party ratings. Most of them have a dedicated sustainability investment team that focuses on ESG research and engagement, and provides strong support to the investment team,” the firm writes on its website.

Hong Kong fund launch

In other news, UBS Asset Management has launched three Hong Kong-domiciled funds.

The Swiss-based asset manager is focusing on the potential of the wealth management connect scheme.

The three products within the UBS (HK) fund series are the Asia Allocation Opportunity, Asia Income Bond, and Global Income Bond funds.

The funds, which the Securities and Futures Commission authorised for sale to Hong Kong retail investors last month, are primed to be offered to investors throughout the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) when the wealth management connect scheme is eventually launched.

“We plan to extend our domestic product shelf to satisfy the growing demand from investors in the Greater Bay Area for diversification opportunities across asset classes and geographies,” said Markus Egloff, head of wholesale client coverage, Apac, at UBS Asset Management.

The wealth management connect scheme, which was announced in June 2020, will allow people in the GBA to carry out cross-boundary investment in wealth management products distributed by banks presence in the GBA. It has southbound and northbound components, depending on the residency of the investors.

Residents of mainland in the GBA will be able to invest in eligible investment products distributed by banks in Hong Kong and Macao; and residents of Hong Kong and Macau will be allowed to invest in eligible wealth management products distributed by mainland banks in the GBA.

The Chinese, Hong Kong and Macau financial regulators signed a memorandum of understanding to set up supervisory, enforcement and liaison arrangements for the scheme last month.

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The firm has lodged an application with the Monetary Authority of Singapore (MAS) to roll out the AIA Singapore Bond Fund and the AIA India Equity Fund, according to the regulator’s records.

The funds are Luxembourg-domiciled Ucits products.

AIA IM in Singapore was incorporated in 2016 as the hub for regional investment management and central trading for its Hong Kong parent insurer, AIA. In 2019, AIA IM launched its Luxembourg Ucits funds platform, AIA Investment Funds.

The platform already has nine funds, but all strategies are only available to professional investors.

Our sister publication Fund Selector Asia sought more information from AIA IM, but the firm was not able to provide more information in time for publication.

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