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Enoch Yiu

Outgoing Schroders boss learned early to invest for long term
Elisabeth Scott, outgoing managing director of Schroders Investment Management (Hong Kong), began her career as an analyst of US stocks in Edinburgh in her native Scotland.
Ms Scott joined Schroders in Hong Kong in 1992, initially as a US equity fund manager, and is now managing director of the company. She is also the chairwoman of the Women's Foundation and a former chairwoman of the Hong Kong Investment Fund Association.
After experiencing many booms and busts in the Hong Kong stock market during the past 15 years, she is relocating to London with her husband, Richard Beccle, an advertising agency executive, and their two children, Edward and Helena.
Why did you decide to leave Hong Kong after 15 years?
It is a combination of professional and personal reasons. My next career move was likely to involve a regional role, which would require a lot of travelling. But I have two young children, and I do not want to travel so much. It makes sense for us to relocate to the UK, where we can be closer to cousins and grandparents.
I will take six months' unpaid leave to settle the family in London and arrange schooling for the children. Then I will be back to work at Schroders in London in September.
But we will come back to Hong Kong. I will let my children continue to learn Chinese in London, and my husband will still have business here, so he will be back at least once a quarter.
What will you miss most about Hong Kong?
The list is very long - Hong Kong's simple tax regime, the warm weather, the MTR. The city is so efficient and compact, and people are so friendly. London is much bigger and more difficult to navigate.
One of the setbacks of leaving now is the weak US and HK dollars. I watch the pound on a daily basis because my pension is in Hong Kong dollars, so the strong pound is not good news for me if I take my pension fund now.
How do you compare the investment market now to when you first arrived?
In 1992, everything we talked about in meetings was 'property, property, property'. The benchmark Hang Seng Index was about 5,000 points, and the market was dominated by property stocks. There was no China stock because the first mainland firm listed in Hong Kong only in July 1993. At the time, China was a distant prospect.
Now the HSI rose to a record 31,500 points a few months ago, and H-shares represent more than half of the market capitalisation.
And the fund industry has changed a lot. I do not have the figures for 1992, but in 1999, only 4 per cent of the adult population had a mutual fund investment. Now it is 18 per cent. The fund industry has become bigger and more competitive.
As you are leaving Hong Kong, can you give us a run-down on your investment here?
Sadly I did not buy any property in 1992, or I would have had a big windfall. My first investment was the Schroders Hong Kong equity fund. I have held it for more than 15 years, and the market experienced a great deal - the huge market boom 1993, then the sharp fall in 1994 due to the mainland economic control measures, then the red-chip bubble in 1996 and the handover in 1997. Then came the Asia financial crisis in 1998 and the dotcom bubble in 2000, followed by the Sars outbreak in 2003. More recently, we had a market boom last year after the proposal to let mainlanders trade in the Hong Kong market and then the recent sharp fall last month due to the worries over the subprime crisis.
There have been a lot of opportunities to 'buy high and sell low' in the past 15 years.
As the Hong Kong head of a fund company, as well as a mother of two, do these factors affect your investment strategy?
As a fund manager, our company demands we put our clients' interests first. We cannot trade in the short term, which means we have a minimum hold of at least 60 days. Our view, thus, is for longer-term investment.
Being a mother of two also forces me to invest for the longer term to cover the school fees, college fees and other expenses for the children. I do not want to suffer from the 'buy high, sell low' mistakes, so I take a long-term view and invest regularly and consistently to smooth off the volatility of the market.
What is in your current investment portfolio?
I have several Schroders funds - the Hong Kong equity fund, and the agricultural fund, while most of my pensions are invested in Schroders balanced investment funds. I also have some individual stocks which can pay high dividends.
My investment philosophy is that when you do not have enough time to study all the details or information of companies, it's better to invest in funds and let the professional fund managers do the job for you.
I also focus on dividend payments. Some years ago, I had an investment in Jardine Strategic Holdings, which paid a 6 per cent yield, higher than the average 4 per cent yield paid by other HSI firms at the time. Dividend payments provide security to the return of the investor during a volatile market.
What was your best investment  decision?
I invested in a US stock called BP Prudhoe Bay Royalty Trust, which paid a high dividend from the oil production fields in Alaska. I bought the stock in about 2000, and the dividend payment gave me back my initial investment in three years.
The stock's share price and dividend are closely related to oil prices.
I purchased the stock for just above US$10 a share, and its price dropped to about US$4 when oil prices fell. But I held it until oil prices went up again, and the share price reached about US$60 to US$65 in 2005.
In a sense, I sold it too early, as oil prices went above US$90 per barrel, and the stock reached US$80. But I have taken a good profit from it.
What was your worst investment decision and how did you manage to get out of it?
It was another US stock called Pillowtex. I bought it in 1999 at US$8, and it went up to US$50. It looked to be a good investment for a long time. But then it stepped into non-core businesses through acquisition, and it eventually went bankrupt in 2003. Unfortunately, I did not notice the bankruptcy because I had been too busy and I did not get out of it. I lost all my investment in the stock. But it was a good lesson that if you do not have time or  information about a company, you should get out of the stock.
Scottish people are known to be good fund managers and bankers. Why?
The Scottish are very careful and cautious about their pennies, and there are stereotypes that they are very mean. Our grandparents always told us to look after the penny and the pound. The Scottish, like Chinese, also have an entrepreneurial spirit. They can make a big business out of something small, and they have a long-term view for coping with difficult times. Also, Scotland is far away from other major markets, which also allows the Scottish fund manager to be away from the noise, so that they can make their investment decisions more objectively.
When will you start letting your two children invest their money?
My son already has showed an interest in investments. He has started collecting stamps and is concerned about the future value of the portfolio. My daughter is still keen on spending. I think it is important to teach the children how to manage their money properly and to build up a good saving habit.
Do you think you are rich or poor?
It is important to be rich in your life. I am lucky to have a marvellous husband, two great children and a lot of friends. That is rich enough for me.
The Scottish, like Chinese, also have an entrepreneurial spirit. They can make a big business out of something small



Canny Scot knows how to weather market storms