ASSET ALLOCATION
BY: MAHA KHAN PHILLIPS
PROFILE BY: STUART NEWMAN
A
sset allocation involves to continue to re-invest in your
MANISH KUMAR SINGH
putting together a set of knowledge, and keep learning
portfolios that and understanding the new Title: Head of Structured
encompasses multiple diff erent strategies and the market, and to
Product Solutions
asset classes, while being mindful sit back and think, and look at
Current employer:
of the diff erent asset classes and the big picture,” he says.
SG Hambros Bank
Previous employers: Société
how they work together to fulfi l Arun Muralidhar, chairman of
Générale Corporate & Investment
the long term objectives of the Mcube Investment Technologies, Banking; UBS
portfolio. “Asset allocation has believes that developing University: Indian Institute of
quickly become a hot growing knowledge of the currency
Technology; Cranfi eld School of
area because there is a real need market is a good place to start an
Management
for advice,” explain Peng Chen, asset allocation career. “Currency
Degrees: Bachelors in Chemical
Engineering; Masters Finance
CFA, president and chief forces you to think across
and Management
investment offi cer of Ibbotson borders. You have to think about
Professional qualifi cations:
Associates in the US. what is happening across all CFA Level III candidate
He believes that people are markets, and apply it to what
putting a lot more weight behind you’re doing.”
What attracted you to this career path?
asset allocation. “It’s really a According to Mercer’s 2008
I was attracted to this career through my keen interest in
technique built upon asset allocation survey, pension
economics, maths, capital markets and the business
diversifi cation. Th ere are a lot funds have identifi ed both
opportunities it presents
more developments now in terms currency and global tactical asset
of incorporating non-traditional allocation (GTAA) as areas where
What are the major challenges you face in your
asset classes like hedge funds, and they intend to increase their
position?
also, separating alpha and beta investment exposure.
Being in a multi asset role, the challenge is to read widely
and using other non-traditional In the UK, 3.9% of funds use
and follow the markets closely so you are able to choose
assets that may not have the active currency, and 5.7% use
the right asset class to structure on. Staying up-to-date
typical symmetrical pay out GTAA. In Continental Europe,
with innovations in the derivative world is also important.
pattern,” he explains. 2.3% of funds use active
currency and 3.4% use GTAA,
Are there certain skills you would consider useful for
your job?
SKILL SETS according to the survey. Mercer
Good analytical skills, multi asset knowledge or a strong
To work on an asset allocation expects these fi gures to rise.
desire to gain expertise in multiple assets. Good maths
team, a candidate will need GTAA is an increasingly
skills and attention to detail are important as
fundamental investment analysis popular part of the asset
structuring/ trading errors may be costly.
skills, because he or she will have allocation debate. Th e idea
to understand the key risk and behind it is that there are a lot of
How do you think the role you’re in now will change
return attributes of diff erent asset short term market ineffi ciencies
over time?
classes. “You’re trying to pull that could be exploited, if you
It should be more investment and strategy driven. It‘s
these things together and form a were underweight or overweight
through accuracy and insight that the best asset classes
portfolio. In some sense it’s like certain asset classes or market
are identifi ed and picked to structure products on that
forming a team. You have to segments at the right time.
eventually delivers returns.
know the strengths and “GTAA depends on the quality
weaknesses of all your players of your short term signals. It
Do you have advice for someone intending to pursue
and then pair them together,” deviates a little bit from long
the same career path?
says Chen. He also believes that term asset allocation principles, Multi asset skills developed by spending time in equities,
candidates who want a career in where you’re trying to debt, rates etc can be a good way to progress into such a
asset allocation must be able to understand the long term risk role, and be effective in it. Strong interest in markets and
hold a long-term view. “From a benefi ts of some of these asset familiarity with using fi nancial tools is also very helpful.
skill perspective, it requires you classes,” explains Chen.
Cg
Careful time management is very important in this role.
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