BOS Launches New Asset Allocation Framework
The private banking arm of OCBC has introduced a new systematic strategic asset allocation framework based on results from a year-long study.
Bank of Singapore has launched a new risk-based strategic asset allocation (SAA) framework aimed at helping clients build «resilient, long-term investment portfolios», according to a statement. This framework was developed by the Singapore private bank’s chief investment office after a year-long study and stress testing of 120,000 portfolios. The efforts were led by chief portfolio strategist Owi S. Ruivivar who joined the bank in 2024.
Ruivivar has 30 years of experience, including her previous role at Singapore sovereign wealth fund GIC, leading investment-oriented thematic research and the future markets investing team.
Robust Optimisation
The SAA model adopts a so-called «robust optimization technique» which aims to «create investment portfolios adapted to withstand uncertainties in market conditions and key inputs, such as expected returns and risks». This includes the ability to demonstrate resilience under a wide range of scenarios.
This contrasts with the commonly used techniques of mean-variance optimization (MVO) and market cap-weighted benchmarks. MVO tends to underperform when actual market conditions diverge from forecasts, while market cap-weighted benchmarks have high concentration risk in the US, which has increasingly become a source of investor worries.
«Traditional models depend on accurate forecasts, which are increasingly harder to make in today’s uncertain environment, where market cycles are becoming more unpredictable and volatile,» said Jean Chia, chief investment officer at Bank of Singapore. «Our new framework offers portfolios more resilience, helping clients navigate uncertainty with more clarity. This is how we provide long-term value to our clients.»
