Me & My Money: Career is our most crucial asset, says financial services exec

SINGAPORE – A career is our most important asset as it allows us to make other investments down the road, says financial services executive Eric Chng.

“People often talk about their investment portfolio as a means of asset protection or growth. To achieve these two things, we must first have asset-generation capabilities.”

Investors buy a share for its attractive dividend or a bond for its secured fixed income, he says. In the same way, people need to invest in their careers to gain capability to accumulate and allocate assets.

Mr Chng, 49, has spent more than two decades working in the financial markets, and is now State Street’s Asia-Pacific head of cross-product client solutions for alternative investments and private markets.

He was regional head of business development for global hedge fund administrator Citco before joining State Street in August 2021.

Before that, he held key management roles at BNY Mellon and senior positions at the Singapore Exchange, Daiwa Capital Markets and Societe Generale Corporate and Investment Banking. 

“I have had a unique career path, undertaking roles from the front to the back office... My exposure to investors of all scales and complexities has given me a deep understanding of the trends that impact our world,” he says.

He notes that the Asia-Pacific has been the growth engine for State Street’s global business. “The alternative asset manager segment I oversee is capturing increased market share and will continue to be a key contribution to the growth of our business in the region.”

The Singaporean, who holds a master of business administration from Australia’s Macquarie Graduate School of Management, admits that his passion for work sometimes comes at the expense of personal and family time.

“Balance is important, so I try to remind myself that life is a marathon – you have to sprint now and then, but you need to find and maintain a good pace so that you can breathe a little,” says Mr Chng, whose partner works at a global headhunting firm. They have a daughter, 17, and son, 14.

Q: What is in your personal portfolio?

A: My portfolio is very diversified. I invest my money in insurance, equities, bonds, commodities, properties and private markets.

Insurance is important in my personal portfolio. With lower disposable income in my early years, I tended to buy investment-linked policies which offered lower protection value. As I advanced in my career, I focused on covering myself with adequate critical illness, accident and term coverage via riders. The protection per dollar is much higher and I can use the savings to invest.

Probably because I am in the financial industry, I believe that over time, stocks tend to outperform most other asset classes. My allocation is 60 per cent equities, 20 per cent bonds and 10 per cent alternative asset classes. I usually hold 10 per cent in cash to capture good buying opportunities.

I began my investment journey by analysing single stocks that generate high dividend yields, and buy to hold for a 10-year period. I also look at their market capitalisation, fundamentals and ownership structures. I prefer long-term large dividend stocks held by pension funds and large asset owners as they tend to be more resilient.

Thirty per cent of my stock portfolio is in direct holdings I have invested in over time. These are mainly Asia-Pacific equities. The remaining 70 per cent is through discretionary mandates and tends to be via ETFs (exchange-traded funds), which allow me to build a diversified portfolio globally at a lower cost.

Robo-advisers and other investment platforms are also a great way to diversify and gain more global exposure in my asset allocation. Naturally, I advise caution and doing due diligence as not all platforms are equal.

From a returns perspective, it is no surprise that the equity markets have been extremely volatile, so my portfolios were down anywhere between 8 per cent and 33 per cent in 2022.

These are near-term market corrections, in my view. I still see opportunities to increase my exposure and lower my portfolio’s average holding cost, in areas such as healthcare, telecommunications, logistics and tourism. I am 60 per cent weighted to US equities, with the rest across Europe and Asia.

My most unconventional investments are in trade finance. I came across a company that specialises in this area and provides unique exposure with generally 8 per cent to 11 per cent net returns on a secured basis.

I also own properties in Singapore and Australia. My investment property in the Gold Coast is a two-bedroom apartment with a pretty high rental yield. Besides my investments and savings, I have a lasting power of attorney and a will in force.

Q: What has been your biggest investing mistake, and best investment?

When I started my career, I was young and had a more aggressive investment approach. I made careless bets based on groupthink and blind trend following.

When equities started trending downwards, I became more fixated on daily price movements and convinced myself to leverage down in the hope of a rebound. That was a painful but important lesson. My biggest investment should have been to focus on my career and income generation, and leave my investment selection to the experts. 

My best investment is probably my home, which I snapped up at an auction. The value has gone up more than 30 per cent, which gives me a great inflation hedge.

Q: Describe your lifestyle, and how your growing-up years shaped your perspective of money.

My family and I live in a 99-year leasehold condominium in Tiong Bahru that I bought at the auction about eight years ago. It is a 1,500 sq ft apartment with three bedrooms, remodelled into a two-bed configuration with two workspaces.

I drive an Infiniti Q50 2.0 Turbo – it is a powerful car and I thoroughly enjoy driving it.

I do not aspire to lavish lifestyles or material possessions. I am content that my income pays for my current lifestyle and generates positive balances, which I use to invest for retirement.

I don’t think there is a definitive age for retirement – it is a milestone you achieve when you have paid down all your liabilities and have enough savings to live your preferred lifestyle for the next 15 to 25 years.

At that point, I will have the option of either full or part-time employment. I hope to continue working in some capacity well past the age of 65 on a freelance basis, or run my own business. I will also reduce time spent working in favour of pursuing personal interests. At that stage in life, work and income ought to be a hobby, not a career.

I grew up in an average middle-income family. My father was the sole breadwinner and worked in auto sales his entire life. He started a used car trading business and is now happily retired. My mother, who was a dedicated housewife, died more than 20 years ago. I have a younger brother and a younger sister.

My father worked hard and saved his money to ensure he paid for the Housing Board flat we grew up in and our education. Extremely risk averse, he used to see investing as a sure-fire way to lose his hard-earned savings. You could say that his children were his biggest investment.

Mr Chng’s top three investing tips