Asset Allocation

Conservative Portfolio

Capturing some capital growth with low risk exposure.

 Tactical Asset Allocation
Equities15.00%
US6.50%
Europe3.00%
Japan2.00%
Asia Pacific ex Japan3.50%
Fixed Income67.00%
Developed Markets (DM)45.00%
DM Government Bonds27.00%
DM Corporate Bonds18.00%
Emerging Markets (EM)22.00%
Alternatives0.00%
Gold0.00%
Hedge Funds0.00%
Cash18.00%

Source: DBS CIO Office, Morningstar Investment Management Asia Limited, as of Apr 2019

Notes:

  1. The above are based on 3-month views.
  2. Asset allocation does not ensure a profit or protect against market loss.
  3. “TAA” refers to “Tactical Asset Allocation”. “SAA” refers to “Strategic Asset Allocation”.
  4. The expected return of the strategic asset allocation (SAA) is based on capital market assumptions derived from Morningstar’s econometric model that relies on historic, current and forecasted data on the indices highlighted below. The information is for reference only.
  5. The expected risk (or expected standard deviation) of the SAA model represents the expected risk level of the portfolio based on asset class relationships (correlations) and expected volatility, based on the indices highlighted below. The information is for reference only.
  6. Morningstar’s SAA models started on 1 October 2010. Morningstar reviews the strategic asset allocation on an annual basis. The current Strategic Asset Allocation (SAA) is as of 1 December 2018.
  7. Based on the SAA model, the Dynamic model has the highest risk, followed by Balanced, Moderate and Conservative, with Conservative being the least risky (DBS to check the name of the portfolios). The risk consideration that was used in formulating the Strategic Asset Allocation was the expected volatility as measured by expected standard deviation.
  8. The investor type classification for the portfolio has no direct relationship with the Financial Needs Analysis customer risk profile types and the portfolios are not assigned any product risk rating based on the bank’s proprietary risk rating methodology.
  9. The above SAA model is effective from December 2018 to November 2019 and are subject to change.
  10. The expected return and expected risk are based on the following indices for calculation:
    • Equity: US – MSCI USA GR USD; Europe – MSCI Europe GR USD; Japan – MSCI Japan GR USD; Asia ex Japan - MSCI AC Asia Ex Japan GR USD
    • Bond: Developed Market Bonds – Citi WGBI USD; Developed Market Corporate Bond – Citi WBIG USD; Emerging Market Bonds – JPM EMBI Global Diversified TR USD
    • Alternatives: Gold - S&P GSCI Gold Spot; Hedge Fund – Credit Suisse Hedge Fund USD
    • Cash: BofAML US Treasury Bill 3 Mon TR USD

Morningstar’s Strategic Asset Allocation:

The core methodology of Morningstar Strategic Asset Allocation Model used to determine investment portfolios is mean-variance analysis. Mean-variance analysis was developed by Harry Markowitz in the 1950’s and provides a mathematical framework for generating portfolios that maximize expected return for a given level of risk (efficient portfolios). Mean-variance analysis requires three statistical estimates for each asset class: 1) Expected return (Mean), 2) Expected risk (Standard Deviation), and 3) Expected relationship between the asset classes (Correlation Coefficients).

Morningstar Investment Management (MIM), through its heritage in Ibbotson Associates, is widely viewed as one of the leading authorities on the development of capital market assumptions. They have written numerous award-winning articles on the subject. MIM’s “building block” methodology for estimating returns was first developed in the 1970s and continues to be improved upon.

Disclaimer by Morningstar:

For Professional Investors Only. Morningstar Investment Management Asia Limited (“Morningstar”) is licensed and regulated by the Hong Kong Securities and Futures Commission to provide investment research and investment advisory services to professional investors only. Morningstar relies on certain exemptions (Singapore Financial Advisers Regulations, Section 27(1)(e)) to provide its financial advisory services to institutional investor recipients in Singapore.

Morningstar provides strategic asset allocation to DBS Bank Limited (“DBS”) based on certain criteria set by DBS. DBS has the authority to accept, reject or modify Morningstar’s strategic asset allocation. Morningstar takes no responsibility for advice provided by DBS to its clients. Morningstar is licensed with the Hong Kong Securities and Futures Commission to provide investment research and investment advisory services to professional investors (which include DBS) only. Morningstar is not acting in the capacity of adviser to individual investors. Morningstar is not affiliated with DBS. The Morningstar name and logo are registered trademarks of Morningstar, Inc. All investments involve risks. The information is for your reference only and does not constitute any offer or solicitation to enter into any investment arrangement. Past performance is not indicative of future performance. You should refer to relevant investment offering documents for detailed information prior to investing in any investment option.

DBS Disclaimers and Important Notice:

  1. The information herein is published by DBS Bank Ltd (“DBS Bank”) for information only. This publication is intended for DBS Bank and its clients or prospective clients and may not be reproduced, transmitted or communicated to any other person without the prior written permission from DBS Bank.
  2. This publication is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to subscribe to or to enter into any transaction; nor is it calculated to invite, nor does it permit the making of offers to the public to subscribe to or enter into, for cash or other consideration, any transaction, and should not be viewed as such. This publication is not intended to provide, and should not be relied upon for accounting, legal or tax advice or investment recommendations and is not to be taken in substitution for the exercise of judgment by the reader, who should obtain separate legal or financial advice. DBS does not act as an adviser and assumes no fiduciary responsibility or liability for any consequences financial or otherwise.
  3. The information and opinions contained in this publication has been obtained from sources believed to be reliable and neither DBS Bank nor its related companies or affiliates (collectively, “DBS”) make any representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose. Investment involves risks. The risk of loss from investment can be substantial and may even result in losses in the principal amount. Opinions and estimates are subject to change without notice. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment. DBS accepts no liability whatsoever for any direct indirect or consequential losses or damages arising from or in connection with the use or reliance of this publication or its contents.
  4. The information herein 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.

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