DBS' private bank raises over $1.6 billion from two products

DBS' Barbell Income Fund drew about $970 million in less than six weeks, while the other product targeting sustainable investing attracted another $690 million.
DBS' Barbell Income Fund drew about $970 million in less than six weeks, while the other product targeting sustainable investing attracted another $690 million.ST PHOTO: KELVIN CHNG

SINGAPORE (BLOOMBERG) - DBS Group Holdings' private bank raised more than $1.6 billion from two in-house products, including a new one targeting sustainable investing.

The Barbell Income Fund, which invests in stocks, bonds and cash, drew about $970 million in less than six weeks after introduction, South-east Asia's largest bank said on Tuesday (March 16). The other product based on environmental, social and governance principles attracted another $690 million since its October launch, it said.

Chief investment officer Hou Wey Fook is among those advocating the so-called "barbell strategy", which focuses on both growth and more conservative investments. The portfolio he runs is a combination of traditional asset classes like stocks with exposure to a digital economy, along with corporate bonds and real estate investment trusts.

"We can expect rates to stay at ultra-low levels in the foreseeable future as a result of structural changes in global demographics, and the trend toward digitalization," Mr Hou said. "In this new normal, investors cannot rely on a traditional portfolio strategy that utilises bonds only - a more robust multi-asset strategy is better positioned to enhance portfolio yield."

The Barbell fund focuses on high-dividend stocks and uses options to help enhance yield, DBS said. The Barbell Income Fund is an addition to the bank's investment products referencing the CIO Barbell Strategy Portfolio, which has returned 26 per cent net of fees as March 10 since its August 2019 inception.

DBS's ESG Outperformance Trade is a three-year warrant, which takes a long position on the MSCI Emerging Markets Asia ESG Leaders Index while simultaneously going short the MSCI Emerging Markets Asia Index from which it's derived. The first tranche of this product was introduced in 2018 and has returned close to 100 per cent since its launch, the bank said.