- Head of Asia-Pacific Client Group
Singapore, Individual
Change
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed.
It was great to have our CEO Jean Hynes join us in Singapore at this year’s Milken Asia Summit 2022. Jean was part of the opening panel on trends in asset management. In my view, three takeaways from her comments are particularly relevant for investors in Asia:
- Sustainability is here to stay: We believe it will fundamentally change financial markets within the next 10 – 15 years. Long-term themes, including climate-change mitigation and adaptation, are impacting capital market flows already. And we’ve seen increased calls from clients expecting their asset managers to act as long-term fiduciaries, ensuring that capital markets and the companies invested in are contributing to a sustainable future.
- Adaptable technologies will speed gains: It’s clear that integration of technology will be a key driver of success for investors. It’s present in everything we do at Wellington. One of the many ways we use it is to organize, govern, and harness data in service of generating deeper insights for clients. Our technology is evolving constantly and is designed to uncover unfolding and future opportunities around the globe. This helps us spotlight opportunity sets that reflect specific investment goals.
- Increased allocations to privates and alternatives will continue: The private market opportunity set continues to evolve rapidly. For example, historically, there were some 200 public companies and 100 private ones in biotech1. Today, more than 2,000 are private, and perhaps 500 public2. This has been a persistent investment opportunity over time on an institutional level, and our retail clients want access to it as well. We expect this to be a big trend for the next decade.
The old regime is passing
The Milken Asia Summit had a wide range of panels, and I was fortunate enough to spend time engaging with clients across multiple sessions. An overarching theme was that the market regime of the past 25 years is changing, with persistently higher inflation at the root of this transition. These changes are likely to have profound implications for how we think about asset prices, markets and even our industry.
Higher and more volatile inflation likely will mean larger swings in monetary policy, potentially resulting in shorter economic cycles. Likewise, higher and more volatile discount rates may increase asset price volatility, along with performance dispersion between companies and even countries, all of which should be positive for active management, in my view.
Sustainability is no longer optional
With the energy crisis in Europe and energy prices increasing globally, the sustainability revolution has faced a barrage of scrutiny from investors and politicians this year. Yet the fact remains: climate change will intensify, and future warming is unlikely to reverse. Regardless of inflation, recession or political cycles, increasingly frequent and severe climate events are likely on the horizon. Given the scale and inevitability of the disruption to come, we believe sustainability will prove to be one of history’s defining investment megatrends, alongside industrialization and digitalization.
Moving forward, regulation, fiscal spending, regional innovation and cultural proclivities will all play a role in determining the pace of change for each country. Understanding the interplay between these factors, combined with industry-by-industry expertise on a global scale, will be essential to recognising winners and losers. Sustainability and ESG considerations are an important part of any long-term investment thesis. They have an impact on stock prices and return potential in the long run. As such, we don’t see employing a sustainability lens as concessionary, but as synergistic to the pursuit of investment returns.
Innovation: now more than ever
Innovation was a core theme, both at Milken panels and with clients more broadly. Technology and sustainable investing were key focus topics. Despite the recent underperformance of sectors like tech and fintech, in our view, we shouldn’t lose focus on how digital disruption likely will define returns this coming decade. The recent sell-off isn’t surprising: there was froth if not euphoria in many tech valuations heading into this year, and rising rates lead to a repricing of forward earnings, particularly for high-growth assets.
This could be an opportunity for long-term investors who stay true to their philosophy and process. If anything, we expect an acceleration in digital disruption rather than a pullback. Many of the trends that drove tech dominance over the last decade remain in their relative infancy. Meanwhile, from artificial intelligence and machine learning to robotics, blockchain and 3D printing, emerging technologies are rapidly maturing and will enable more cost-effective implementation of efficiency-driving technologies across sectors.
Here to stay: private equity and alternative investments
It’s interesting to note that investors in privates and alternatives are often the first to devote capital to innovation and sustainability, which, as discussed above, are two other trends solidly established in Asia. We view our commitment to building world-class capabilities in these categories as a long-term investment.
Event replay
Milken Asia Summit panel: Asset management at an inflection point
In this replay from the 2022 Milken Asia Summit, CEO Jean Hynes joins a fascinating discussion with some of the leading figures in asset management to share their perspectives on how asset managers can help clients navigate increasingly complex markets.
1Health Affairs 2015, “The evolution of biotechnology and its impact on health care” | 2Statista 2017, “Number of biotechnology companies in the United States from 2012 to 2016”
Expert
Related insights
Showing
of
Insights Posts
URL References
Related Insights
Read next
Showing
of
Insights Posts
Japan’s tech sector: Time for a reboot?
Japan's semiconductor industry has revived global interest in Japan's tech ecosystem. But we believe the dynamism of Japan's tech sector today doesn't start and end with electronics and semiconductors.
3
min
Article
2025-09-30
Beyond the hype: finding AI’s long-term winners
Our expert argues that a long-term mindset based on deep research can help to uncover evolving AI investment opportunities amid the hype.
4
min
Article
2025-04-30
Asia Tech: Building the technology for everything, everywhere, all at once
Yash Patodia articulates the investment opportunities within generative AI and mixed reality - two themes that are supercharging the tech industry. He outlines how Asia is the bedrock of the innovation and where he believes the world’s future growth will be.
Video
2024-07-31
Analysing the bright outlook in Asia tech
Global Industry Analyst Yash Patodia outlines the state of the Asia tech sector today and identifies potential long-term opportunities in this space.
Article
2024-03-31
Thematic investing focus: The education imperative
Education is poised for transformation — and set to see a decade of spending and growth we believe will be unmatched by any since the post-World War II boom.
Article
2024-03-31
China internet: Identifying opportunities amid economic reopening
China’s re-opening and economic recovery from its zero-COVID policy has bolstered our optimism in Chinese internet companies.
Article
2023-12-31
A theme is not an index
Portfolio Manager Dáire Dunne and Investment Director Andrew Sharp-Paul discuss the case for active thematic investing and highlight the importance of avoiding so-called "theme-washing."
Article
2023-12-31
URL References
Related Insights
Past results are not necessarily indicative of future results and an investment can lose value. Funds returns are shown net of fees. Source: Wellington Management
© 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Overall Morningstar Rating for a fund is derived from a weighted average of the three, five, and ten year (if applicable) ratings, based on risk-adjusted return. Past performance is no guarantee of future results.
The content within this page is issued by Wellington Management Singapore Pte Ltd (UEN: 201415544E) (WMS). This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. Information contained on this website is provided for information purposes and does not constitute financial advice or recommendation in any security including but not limited to, share in the funds and is prepared without regard to the specific objectives, financial situation or needs of any particular person.
Investment in the funds described on this website carries a substantial degree of risk and places an investor’s capital at risk. The price and value of investments is not guaranteed. The value of the shares of the funds and the income accruing to them, if any, and may fall or rise. An investor may not get back the original amount invested and an investor may lose all of their investment. Investment in the funds described on this website is not suitable for all investors. Investors should read the prospectus and the Product Highlights Sheet of the respective fund and seek financial advice before deciding whether to purchase shares in any fund. Past performance or any economic trends or forecast, are not necessarily indicative of future performance. Some of the funds described on this website may use or invest in financial derivative instruments for portfolio management and hedging purposes. Investments in the funds are subject to investment risks, including the possible loss of the principal amount invested. None of the funds listed on this website guarantees distributions and distributions may fluctuate and may be paid out of capital. Past distributions are not necessarily indicative of future trends, which may be lower. Please note that payment of distributions out of capital effectively amounts to a return or withdrawal of the principal amount invested or of net capital gains attributable to that principal amount. Actual distribution of income, net capital gains and/or capital will be at the manager’s absolute discretion. Payments on dividends may result in a reduction of NAV per share of the funds. The preceding paragraph is only applicable if the fund intends to pay dividends/ distributions. Performance with preliminary charge (sales charge) is calculated on a NAV to NAV basis, net of 5% preliminary charge (initial sales charge). Unless stated otherwise data is as at previous month end.
Subscriptions may only be made on the basis of the latest prospectus and Product Highlights Sheet, and they can be obtained from WMS or fund distributors upon request.
This material may not be reproduced or distributed, in whole or in part, without the express written consent of Wellington Management.
