Stashaway was founded nearly five years ago in Singapore, it started to offer services in Hong Kong in April 2021 and has recently launched a business in Thailand. It also operates in Malaysia and UAE.
“There is a gap in Asia that can be fulfilled by technology, namely how to bring portfolio management services, which are enjoyed mostly by wealthy individuals, to every investor in Asia without all the costs associated with them,” Stephanie Leung, director and head of Stashaway HK told FSA.
She said that traditional asset managers offer portfolios of many different funds, which are still quite segregated by asset classes. Stashaway reckons that 80% of returns come from asset allocation: having the right amount allocated to different asset classes at the right time.
The digital wealth manager manages its assets via two different frameworks: the first is strategic asset allocation. It takes into consideration an individual investor’s risk appetite and tries to optimize its portfolio to produce the best return for the risk that the client specifies.
The second framework is a tactical asset allocation. It changes the portfolio dynamically according to the kind of economic environment we’re in, Leung said.
Traditionally these wealth management products are available only to wealthy individuals or institutional investors, but not to retail investors. Stashaway makes it possible for everyone to have easy access to them through a mobile app.
“We can do it without any minimum balance. We make use of ‘fractional trading’, so we can actually slice the shares into very small chunks,” said Leung.
The only requirement in Hong Kong is that the Securities and Futures Commission has a HK$10,000 ($1,2854) requirement for opening an account. Stashaway’s target customers are “mass affluent” investors with $500,000 to $2m in liquid assets.
Turning to portfolio strategy, Leung identifies two parallel economic conditions the US and outside of the US. In the US, she sees strong growth, but also high inflation; outside of the US, she sees strong growth while there is no inflationary pressure.
For these two regimes the portfolio tilts are slightly different, with protection provided by inflation-linked bonds and growth potential gained from weightings to Australian equities and energy stocks, for instance.
In Asia it has been increasing its allocation to China internet companies for the past year, following the slump in stock prices in the wake of the regulatory clampdown.
“We find now to be an attractive long term entry point,” said Leung.