How Endowus manages investment portfolios amid market volatility
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How Endowus manages investment portfolios amid market volatility

28 Apr
17 Nov
  • Endowus curates best-in-class funds as building blocks for all portfolios. These funds are selected through a strict, institutional-grade screening process called SMART+.
  • We take an evidence-based approach to investing for the highest probability of success, bringing together strategic passive asset allocation and global diversification at a low cost.
  • When there is market turmoil, the best investors and fund managers would often focus on their core competencies and continue to invest in a consistent manner.

2022 has been a painful year so far for investors. Returns from both equities and bonds have plunged in lockstep — a rare moment in history — on aggressive action taken by the US Federal Reserve to tame record high inflation through raising rates. 

Read more: An explainer on inflation and rates this year

Given the current state of the markets and the impact on portfolio performance, we would like to share with you what Endowus does to manage portfolios in these volatile times. 

Endowus Investment Office: committed to due diligence and client experience

The mission of the Endowus Investment Office (IO) is to unlock institutional-quality research, investment products, and portfolios that were previously only available to private banks, and to provide the same experience to all our clients. Endowus is driven by the belief that everyone deserves to invest well to prepare for their best life. 

IO is made up of 10 investment professionals, including our Chairman and Group Chief Investment Officer (CIO), Samuel Rhee. Our IO team together has over 92 years of industry experience, spanning across equity research, portfolio management, and investment research.

Endowus’ approach to portfolio construction is selecting best-in-class fund managers that avoid large sudden changes to their asset allocation, and not try to chase short-term gains. The short-term gain chasing is more akin to gambling than investing as it is tactical, opportunistic, and driven by short-term punts. Taking a tactical approach would mean that the fund manager is not disciplined about the risk of loss, and may be taking on more risk than is necessary.

Instead, Endowus takes an evidence-based approach to investing for the highest probability of success, which brings together strategic passive asset allocation and global diversification, expressed through best-in-class funds, at a low cost. We select these funds by implementing a strict, institutional-grade screening process that is rigorous, thorough, and continuous — we call this framework SMART+.

Investment Office SMART+ fund screening process

After we have identified the list of best-in-class funds, IO uses a portfolio construction framework developed by the team, incorporating these key elements:

  • Diversification
  • Risk assessment
  • Return optimisation
  • Cost optimisation

The work doesn’t stop after the portfolios have been constructed. We actively track the performance of the funds, and have been doing so rigorously in 2022 amid the market meltdown. To ensure that we communicate actively with our clients, IO engages with investors through regular webinars and monthly (as well as quarterly) performance reports to keep investors updated on how our portfolios are doing. 

Such engagements are part of our efforts to report our performance in a transparent way. With our mission focused on broadening access to institutional-quality research and investment solutions to a bigger base of retail clients, we are committed to providing as much information as we can to investors in these difficult times. 

These forms of monitoring and engagement by IO come on top of the the different layers of monitoring for the investment products that are already executed on a regular basis:

  • Monthly — Every fund on the Fund Smart platform is monitored to make sure that thresholds for risk and return are still being met. Every fund is put on the Fund Smart platform with certain performance expectations, and the team is tasked with making sure those expectations continue to be met within certain thresholds.
  • Quarterly — Even with the monthly monitoring for every fund, we believe it is important to ensure that the advised portfolios continue to have the best of our ideas packaged into them. We analyse the sector allocations, country allocations, factor exposures, and tilts of each portfolio to ensure diversification is maintained on all fronts. We review the available funds in each asset class to make sure we continue to allocate to the most appropriate funds for each portfolio.
  • Annually — We keep an open dialogue with our fund management partners to make sure we are kept abreast of all the important developments in their organisations and changes in the funds that we have on the platform. We conduct due-diligence calls at least once a year to make sure the funds are being managed in a consistent manner.

The market environment has been challenging for clients and our partners. We continue to maintain a strong line of communication with our fund managers to understand how they are managing their funds through this difficult environment.

Read more: Why Endowus doesn’t take trailer fees

Grow your wealth with a team of experts who truly understand your needs and align with your interests. Open your Endowus account and start your investment journey in less than 10 minutes.


Risk Warnings

Investment involves risk. Past performance is not an indicator nor a guarantee of future performance. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. 


Whilst Endowus HK Limited (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors.

Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances.

No invitation or solicitation

Neither the information, nor any opinion, contained in this article constitutes a promotion, recommendation, solicitation, invitation or offer by Endowus or its affiliates to buy or sell any securities, collective investment schemes or other financial instruments or services, nor shall any such security, collective investment scheme, or other financial instruments or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. This is not intended to be an invitation or offer made to the public to subscribe for any financial product or other transaction.

This advertisement has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.

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