Battling portfolios, January 13, 2014

PUBLISHED : Wednesday, 23 January, 2013, 10:59am
UPDATED : Friday, 17 January, 2014, 6:18pm
  • HK49.60m
  • HK57.57m

Portfolio 1 - DEFENSIVE

Hypothetical client profile :

Mrs. Jane Du,  55,  senior business director at an insurance company, conservative in character and risk-averse in investment appetite.  She has 3 dependant children and a home mortgage which will be paid up in 10 years' time.  Her goal is to preserve and accumulate wealth at a steady pace for meeting her personal and family obligations.       

Portfolio's objective :

Having understood Mrs. Du's wealth management goal and constraints, a defensive portfolio with greater allocation into fixed income investments with a good geographical & sectoral diversification is designed to help her grow her wealth in a  stable way, targeting a 4% return p.a..    

Portfolio set up date:  28/11/12
Portfolio Value as of 13/01/2014: HK$ 49.60 million 
Portfolio performance since inception:  -0.8%


1. Given the defensive characteristics of the client, it is recommended that the portfolio is tilted towards fixed income, to generate a constant and steady income to meet her existing liabilities.    

2. As her children are still relatively young, it is also recommended to have some positions in blue chip equities that pay higher dividends so as to accumulate wealth for the next generation.    

3. As she has no overseas liabilities, it is recommended to stay focused in Asia, where the fundamentals are relatively better with higher growth potential.    

Weekly Update:

1. We recommend increasing exposure to high dividend yield stocks with the recent correction.    
2. Maintain positive stance in investment grade bonds relative to cash    

For detailed portfolio information, please click here to download full report. 

Portfolio 2 - DYNAMIC     
Hypothetical client profile : 

Mr. John Koe,  33,  business owner of an IT company, willing to take risks and has an aggressive aptitude for investment.  He and his wife are both working and have no children.  He hopes to settle his financial obligations quickly and enjoy an early retirement.    
Portfolio's objective : 

Having analysed Mr. Young's wealth management objective and risk profile, a dynamic portfolio investing into Asia's secular growth story is designed for him. Taking advantage of the emerging opportunities in Asia, the aim is to achieve for him shorter-term rewards with a target of a 10% return p.a..   

Portfolio set up date: 28/11/2012

Portfolio Value as of 13/01/2014:   HK$ 57. 57million

Portfolio performance since inception:  15.1%


1. As risk appetite is high, a dynamic portfolio is recommended, with allocations to equities at a much higher proportion relative to fixed income investments.    

2. Similarly, Asia's fundamentals remain healthy and with the attractive valuations, it is highly recommended to participate in the markets whenever there are weaknesses.

3. For fixed income, a higher proportion of high yield bonds is recommended for yield pick-up.    

Weekly Update:

1. We recommend to deploy some cash to work given the recent correction.    
2. Stay invested in investment grade bonds.    

For detailed portfolio information, please click here to download full report. 


David Poh is Regional Head of Portfolio Management Solutions at Societe Generale Private Banking.





The views expressed here belong to Societe Generale Private Banking, and are not stock calls by the South China Morning Post.

All names and facts referred to in the hypothetical client profile are fictional. This document has been prepared and/or the information in this document has been collated by Societe Generale Bank & Trust ("SGBT") and may not be reproduced, passed on to any other person. It does not constitute investment advice nor is it intended to be an offer to buy or sell or a solicitation to buy or sell any investment product(s)/asset class(es) mentioned in it, nor an incentive to invest. The investment product(s)/asset class(es) described in this document may not be eligible for sale or subscription in all jurisdictions or to certain categories of investors. This document is not intended for distribution to a person or within a jurisdiction where such distribution would be restricted or illegal. It is the responsibility of any person in possession of this document to investigate and observe all applicable laws and regulation of the relevant jurisdiction. This document may not be conveyed to or used by a third party without our express consent. SGBT is not responsible for any error which may be occasioned at the time of printing of this document.  (Please refer to the full disclaimer in the downloadable PDF file)