The classification and asset allocation are provided by Morningstar Associates, LLC for general illustration only. The classification and allocation have no reference to your investment portfolio or asset allocation held with our Bank. The classification and allocation have no relationship with and do not affect or influence the Investment Objective Setting Questionnaire (“IOS”) conducted by our Relationship Manager. Should there be any conflict between the classification and the allocation and the IOS, the IOS shall prevail. Please note that our Bank does not and will not use the information from the classification and the allocation when analyzing or assessing your portfolio. The classification and allocation are for general purposes only and do not take into account your individual needs, investment objectives and specific financial circumstances. Please also note that asset allocation does not generate positive return or protection against market loss. Please read the notes appended.
- The investor type classification is provided by Morningstar Associates, LLC (“Morningstar Associates”).
- Morningstar Associates began providing model portfolios commenced from 1 October 2010. Morningstar Associates reviews the strategic asset allocation (“SAA”) on an annual basis. The current asset allocation is as of 24 September 2013. The Tactical Asset Allocation (“TAA”) is the tactical overlay of SAA which is based on the tactical view provided by DBS CIO Office. TAA is for target time horizon of 3 months and SAA is for target time horizon of 5 years.
- The risk consideration that was used in formulating the SAA was the annualized quarterly average drawdown. A maximum annualized average quarterly drawdown constraint is in place for different portfolios, with the low risk portfolio having the most restrictive and the high risk portfolio having the most accommodative risk constraints.
- The investor type classification for the portfolio illustrated has no relationship with the customer risk profile types in the Investment Objective Setting Questionnaire adopted by DBS Treasures Private Client and the portfolios illustrated are not assigned with any product risk rating that was based on the bank’s proprietary risk rating methodology.
- The above model portfolios are effective from September to December 2013 and are subject to change.
Morningstar Associates’ Asset Allocation Approach
- A hallmark of Morningstar Associates’ SAA is to broadly diversify the models across investment styles, sectors, sub-asset classes, market caps, and regions. This approach aims to ensure that some part of the portfolio will be performing well in most markets, while the long-term gains of all parts will accrue over time.
- In determining the asset allocation targets, Morningstar Associates uses a multifaceted approach that features a number of sophisticated mathematical models to forecast returns on various asset classes. The modelling process is designed to provide asset targets appropriately aligned with current market conditions and investor expectations. Morningstar Associates also subjects the SAA models to 10,000 simulations to determine how well or poorly they stand up to different market conditions over a five-year period and then make any necessary adjustments.
- Morningstar Associates refines the asset allocation targets based on local market characteristics and behaviours. This results in significant overweight to the Asian markets, both equity and fixed income, in the Strategic Asset Allocation Models, although each model retains varying degrees of exposure to the global markets.
- In determining the most efficient asset targets for the SAA models, Morningstar Associates also factored in a couple of client considerations. First, a maximum “annualized average quarterly drawdown” constraint was imposed for each model. The maximum annualized average quarterly drawdown is the largest average quarterly percentage loss (on an annualized basis) that Morningstar Associates will tolerate for each model, based on calculations using data over the past 10 years. By accommodating the drawdown, the asset mix can be optimised to better meet investor’s long-term performance and risk expectations, as well as better understand each model’s risk potential. In addition, Morningstar Associates maintained a minimum 5% strategic allocation to cash in each model to provide a buffer against market volatility.
Disclaimer by Morningstar Associates:
- Morningstar Associates, LLC, a registered investment advisor registered with the United States Securities and Exchange Commission, and a wholly owned subsidiary of Morningstar, Inc., provides consulting services to DBS Bank Ltd and/or its subsidiaries (“DBS”) in the construction of the model portfolios. Morningstar Associates constructs the model portfolios using its proprietary methodology; DBS has the authority to accept, reject or modify the allocations. The Morningstar name and logo are registered trademarks of Morningstar, Inc. These trademarks and the model portfolios have been licensed for use by DBS. Morningstar Associates is not affiliated with DBS.
- Morningstar Associates acts as consultant to DBS and does not provide advice to DBS’ investment clients. Neither Morningstar Associates nor Morningstar, Inc. acts as an investment advisor to the client or customer of DBS. DBS has engaged the services of Morningstar Associates to preserve the independence and objectivity of the analyses provided. Morningstar Associates does not have any discretionary authority or control over purchasing or selling securities or making other decisions for investors. The use of a model portfolio by a DBS representative or by a DBS client does not establish an advisory relationship with Morningstar associates. Morningstar Associates does not provide individualised advice to any investor, does not determine client suitability, and does not take into account any information about any investor or any investor’s assets. Individual investors should ultimately rely on their own judgment and/or the judgment of a financial advisor in making their investment decisions. Morningstar Associates makes no warranties, expressed or implied, as to results to be obtained from use of information it provides. Morningstar Associates is not responsible for the presentation of fund performance statistics and other fund data.
Disclaimer by DBS Group:
- The content in this Investor Type webpage (the “Information”) is not and shall not be construed as investment advice. This Information is meant to be informative and for general purposes only. It does not take into account your individual needs, investment objectives and specific financial circumstances. The classification, SAA, TAA and model portfolios are for illustration only and do not constitute an offer, invitation, recommendation, or solicitation of any action based upon it.
- Although the content in the information has been taken from sources that are believed to be accurate, no warranty or representation is made by DBS Bank (Hong Kong) Limited and/or its subsidiaries (collectively, “DBS Group” and each of them “DBS”) as to its correctness, completeness, timeliness or accuracy. DBS Group and its related companies do not assume or undertake any duty to advise any person or investor, and accept no liability whatsoever for any direct, indirect or consequential loss arising from or in connection with any use or reliance of this Information or anything contained in it. Investors should read the relevant offering documents (including the prospectus, if any) before deciding to subscribe for or purchase any product. No part of this Information may be (i) copied or duplicated in any form, by any means, or (ii) re-distributed without the prior written consent of DBS. DBS shall have no liability for any misuse or unauthorised distribution of this Information.
- The content of this webpage is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial circumstances. Investment involves risk. The investor type classification has no relationship with and is not any substitute for the Financial Needs Analysis (the “IOSQ”) or your risk profiling under the IOSQ. You instruct us that if there is any conflict or inconsistency between the investor type classification and your investment risk profiling under the IOSQ, the latter shall prevail and be used for assessing your risk profile for your conducting investment product transaction with our Bank. Please also note that asset allocation does not generate positive return or protection against market loss.
Risk Disclosure Statements:
- Investment involves risk. Past performance is not indicative of future performance. Investor should refer to the offering documentation of the product(s) for detailed information (including risk factors) prior to investing in the product(s). If you have any query on the above information or any product offering documentation, you should seek independent professional advice.
- The Information has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong. DBSHK is not acting as an adviser or in any fiduciary capacity.
- If there is any inconsistency between the English and Chinese versions of this Information, the English version shall prevail.