Our Portfolio Counselors are seasoned investment professionals, such as former fund managers with over 10 years' experience in asset management and investment banking. As part of our counseling team, they provide high quality and detailed advice on your portfolio. They will identify potential risks and weaknesses and reveal how to rebalance your portfolio to prevent over concentration in any sector or asset class.
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Biographies of Portfolio Counselors
Eric Kwok, Natalie Chan and Francis Tsang are Citigold Private Client Portfolio Counselors with primary responsibility for multi-asset portfolio reviews and counseling services for high net worth clients.
Biography of Eric Kwok
Prior to joining Citibank in 2014, Eric was an Assistant Fund Manager at an asset management firm for 10 years, co-managing a hedge fund and various portfolios for high net worth individuals on a discretionary basis. These portfolios covered a global multi-asset mandate which aimed for absolute returns.
Eric started his career at an Australian multinational bank in Sydney in 1995 where he worked in financial markets and strategic planning. In 1999, he moved to an international brokerage firm in Hong Kong as an equity research analyst for the Asia Pacific securities market.
Eric graduated with a Bachelor of Commerce (Hons) degree in Finance from the University of New South Wales and an MBA degree from the Australian Graduate School of Management.
Biography of Natalie Chan
Prior to joining Citibank in 2017, Natalie was a Fund Manager at an international asset management firm and a state-owned enterprise responsible for the portfolio management for various key portfolios, focusing on Hong Kong and China investment. These portfolios covered Hong Kong, China and Asia Pacific equity markets and various mandates on a discretionary basis.
Previously, Natalie was an Equity Research Analyst at major investment banks, including Credit Suisse and Deutsche Bank, where she covered Asia Pacific Oil, Gas and Commodities markets.
Natalie has over fifteen years of experience in the financial industry. She holds an MBA degree from George Washington University.
Biography of Francis Tsang
Prior to joining Citibank in 2016, Francis was a Portfolio Manager managing a discretionary portfolio at a family office in Hong Kong. He has more than 10 years’ investment experiences in family offices and fund houses covering global markets.
Francis started his career on private equity investment in Hong Kong and then moved on to public equity investment in Singapore before he was finally relocated back to Hong Kong around 2005. He accumulated rich investment experiences across different countries and industries.
Francis has a Bachelor Degree in Economics and Electrical Engineering from Yale University and an MBA Degree from Harvard University, USA. He is a CFA charterholder.
During last quarter, the market was impacted by listed companies' EPS downgrades, RMB devaluation, and fears of a China-led global recession. Global equities saw the biggest drawdown since 2011. Amidst this high market volatility, I have received more Portfolio 360° meeting requests than usual.
In face of the massive sell-off, reactions of my clients were varied - some were understandably scared, uncomfortable with the volatility; some wondered if this presented buy-in opportunities. However, there was one thing in common - they all wanted to know: what was happening in the market; what the view on the market development is; and how to position under the circumstances.
Know the market and your goals and risks
When I meet my clients, I usually share our market view and the outlook with them. I believe investors can only make an informed investment decision if they have sufficient information to assess the situation. Besides, the opinions of my clients is also important to me. This not only allows me to see things from my clients' point of view and understand their concerns, but also ensures I can serve their needs better through careful planning and preparation.
What is the strategy?
The key question that my clients usually have is: what is the strategy? By turning to our powerful analytical tool Portfolio 360°, a comprehensive analysis of different sensitivity, asset allocation, geographical distribution, and risk / return scenarios can be covered. Portfolio 360° allows me to assess and review my client's portfolio from different perspectives and in an objective way. By assessing the results obtained from Portfolio 360°, I can then help them to construct a suitable portfolio based on their respective financial goals and risk appetite.
The art of constructing an optimal investment portfolio
The concept of portfolio construction is to build a diversified portfolio by allocating assets into different assets classes, different regions, and different sectors to reduce the overall investment risk. Generally, particular asset classes / regions / sectors will perform better than others over a specific period depending on a range of factors including current market conditions, interest rates, currency markets and so on. However, no particular asset class / region / sector consistently outperforms another. Proper diversification can help investors to achieve smoother, more consistent investment returns over the medium to longer term. Asset allocation is an art - there is no fixed rule of how to allocate assets. It all depends on the financial goals and risk appetite of clients.
An on-going process for enhancing financial effectiveness
As markets are dynamic, portfolio construction should not be considered as an one-off consultation service. An optimal portfolio constructed at one point in time may not be considered as optimal as time goes on. I always encourage my clients to conduct regular portfolio reviews, at least once a year, to re-balance or adjust their portfolio to cope with the market development or to reflect their latest financial needs / risk appetite. We are there to provide portfolio advice to our clients, regardless of the situation - and this is a lifelong partnership.
Equity markets have been on a tear this year. From our meetings with clients recently, noticeably many have turned to a more “risk-on” mode in the past months, looking to position for more upside in their investment portfolios.
Know what your portfolio can do for you
Recently, I met with a client who was unhappy that his current portfolio had not been able to capture the upside from the year-to-date rosy gains from global markets. Despite having retired from his busy executive years, given his stable income generation from his own consultancy firm and abundant savings, he would like to take on a more aggressive investment portfolio. He wondered how well his current portfolio was reflecting his level of risk tolerance.
Having understood my client's investment objectives and risk tolerance, I suggested trimming some of his positions in cash and straight bonds, and add positions to equity funds exposure with a diversified allocation to regions and sectors with a strong fundamental outlook.
Using our portfolio analytical tool, Portfolio 360°, I showed my client the "before" and "after" investment portfolio and compared hypothetically their risk-adjusted returns annualized over the past five years. While my client was happy to know what the new portfolio could bring in terms of potential returns, I thought it was equally important for him to get a sense of the risk or volatility he would be subjected to with this new portfolio.
Know the downside too - Scenario Analysis
Using the "Scenario Analysis" of the Portfolio 360° to perform a stress-test on the investment portfolio, I showed my client how his old and new investment portfolio would have fared in the two recent financial crises to hit the global financial markets, namely the U.S. Sub-Prime Crisis in 2008-09 and the European Debt Crisis in 2011-12. This helped my client to get a stronger sense of potential volatility of his portfolio even in extreme market situations.
During the U.S. Sub-prime crisis, my client's new portfolio would have seen a cumulative loss of - 30%, with 6 down months in total and a single worst month's loss of -18%. Post-crisis, the investment portfolio would have returned a cumulative 58% for the year that followed, with the best single month's return of up to 10%. Of course, such a "Scenario Analysis" is just for illustrative purposes. Future markets' movements may not mimic past scenarios. But with the illustration, my client was able to assess whether he could tolerate this sort of volatility under extreme market situations.
Finally my client decided to go ahead with the portfolio rebalancing. We designed an implementation plan for making the portfolio adjustments in stages for better execution so to exploit the current market volatility.
A retiree's approach to portfolio management
The part I enjoy most about my job as a Portfolio Counselor is that I get to meet with clients from a variety of backgrounds. Amongst my clients, a good number of them are retirees, that often have a lot of great stories and wisdom to share. A lot of great investment ideas can be evoked from these highly interactive meetings with my clients, from investment philosophies to practical implementation strategies.
I find that common amongst my clients who are retirees, they often have accumulated a sizeable chunk of wealth and have the goal of preserving it for their next generation. Unsurprisingly, these clients would admit to me that they take a 'risk-averse' approach to investing, often overwhelmingly investing in bonds and balanced funds. These investment options, at an individual level often offer lower returns than other riskier options, but they also tend to have lower volatility which matches well with the retirees' need of capital preservation.
Capital preservation does not always means buying bonds and balanced funds
While there is nothing wrong with being conservative on your investments, I would challenge my clients into considering beyond the typical bonds and balanced funds when constructing their portfolio for the long-run. Recently, I met with a retired client that has long had a strong bias against equities investments. His current portfolio consists of purely fixed income and balanced funds with zero direct equities funds exposure.
In search of a more optimal investment portfolio
Determined to construct a more optimal investment portfolio for my client, I turned to our portfolio analytical tool - Portfolio 360°. I showed my client a hypothetical portfolio with a broad exposure in different asset classes including what he would consider "highly risky" equities. As a result, my client was surprised to see not only a more diversified portfolio but one that offers potentially enhanced return and lower risk level. The reason being that different asset classes' performances are often driven by different market factors. So under different market environments, a portfolio consisting of different asset classes with low correlation, can sometimes offset some of the risks exposed by the individual asset classes. For this particular client, he had invested a majority of his portfolio into fixed income. Thus, he was extremely exposed to the risks like interest rate hikes and default risks. By adding low correlations equities into his portfolio, despite the volatility of equities are higher than bonds, the overall portfolio's potential risk level was actually lowered. Moreover, the overall portfolio's potential return was also enhanced.
The idea that investing in bonds and balanced funds is the best option for a conservative investor is a common misconception. A portfolio that is made up of different asset classes with low correlation could potentially offer great enhancements in terms of risk-adjusted returns.
I would highly recommend my clients, before making any investment decisions for achieving their long-term goals, to be open to consider all the investment options available. One may be surprised what a little 'mix-and-matching' can do to your portfolio's risk-adjusted returns.
It is the Season of Bonuses – portfolio construction tips for working professionals
After much Lunar New Year holiday indulgence, a lot of our clients who are working professionals find the added joy of having fresh year-end bonuses arriving in their bank accounts at their discretion. Busy senior executives would likely choose to engage with their financial advisors for investment recommendations. Before deciding on which stocks or bonds to invest into, there may be areas worth paying more attention to from a portfolio construction perspective that can potentially help enhance the risk-adjusted return of your investments.
Take the case of one of our clients- Mr chan:
Mr. Chan is a senior executive of an international bank. He keeps separate investment accounts with three different financial advisors to take advantage of the diverse investment views and service offerings. He invests heavily in financial stocks as he feels he can leverage on his deep understanding of the industry and also Asian stocks with the intention of diversifying his portfolio. From his fifteen years of working in the bank, he has also accumulated sizable stock options as bonuses from the company.
Two things Mr. Chan can do to enhance his portfolio:
Take a holistic view in assessing the investment portfolio
In his case, taking investment recommendations from various advisors and executing them under multiple investment accounts have made him fall prone to underestimating the overconcentration risks in his portfolio. Without combining his investment accounts, Mr. Chan was not aware that around 50% of his combined stocks/funds investments are in the financial sector. We recommend clients to make investment assessment based on a consolidated view of all of his/her investments.
Sensitivity analysis with one's business area
Fast-changing industry dynamics and shorter business cycles may also make it worthwhile for the client to construct a more diversified investment portfolio and lowering risks associated with his business industry.
In the case of Mr Chan, a sensitivity analysis on his investment portfolio shows his company's stock and his investments in financials and Asian stocks run quite a high correlation with each other. In other words, in the unfortunate event of career mishaps on the client's part, the risk is high of losses both from an earnings generation perspective (the client's job) as well as from a wealth accumulation perspective (the client's investments).
Clients holding a similar portfolio as Mr. Chan may be better off constructing a more diversified portfolio with less-correlated asset classes of choice. A sensitivity analysis carried out to measure the correlation between the client's existing investments and a proxy for his career industry would help bring to light what portfolio adjustments need to be made.
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This website is for information only and is not intended to be constitute any offer or solicitation to buy or sell. Investors should refer to the relevant offering documents for detailed information prior to subscription. Investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Investors investing in investments denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Investment prices may go down as well as up. Unless specified, these investments are not obligations of, guaranteed or insured by Citibank (Hong Kong) Limited, Citibank, N.A., Citigroup Inc. or any of its affiliates or subsidiaries, or by any local governmental or insurance agency. Investment Services are not eligible for U.S. persons and might only be applicable to limited jurisdiction.