According to the CFA survey, ‘The investment professional of the future’, investment industry leaders rank ‘T-shaped skills’ as the most important future skill category. Some 49% of respondents rank these first, followed by leadership skills (21%), soft skills (16%) and technical skills (14%).1 T-shaped people are subject matter experts; they adapt to changing environments, and can work across disciplines. They combine deep knowledge in a single field with wider knowledge in other parts of the ecosystem, and have the competencies to connect them.
We would argue that most investment professionals actually have T-shaped skills, being experts in analyzing companies, but always curious and interested in the world around them. However, working across disciplines comes less natural to the fund manager. To keep up with developments on the sustainability front, portfolio managers need to read up on the work of climate and human rights experts. Being able to use big data and machine learning to exploit behavioral biases is another skill that the future fund manager needs to have.
This is also the reason why we believe consultants and clients of asset managers focus more on the topic of diversity. The investment industry has already moved from the star manager model to the investment team model. However, the investment teams of today are mostly compiled of people that come from rather similar backgrounds, and more importantly are mostly trained to be an expert in the same subject matter. There is hardly any investment professional who does not have a CFA or similar qualification. But there are a very limited number of climate scientists or psychologists with a focus on business ethics, for example.
In the field of AI and big data, it is already quite common for investment teams to include data scientists2, making the team more T-shaped. Moreover, the two trends can complement each other; to make up for the lack of data on ESG, at Robeco we employ two climate data scientists. Of course, all of these professionals also need to understand finance. And for the fund manager, this means he or she needs to manage a team with different specialists and characters to come to better-informed investment decisions.
When Robeco started the process of integrating ESG in its investments about 10 years ago, portfolio managers needed to become familiar with the subject. They needed to start thinking about how topics like climate change, the rising costs of health care, use of child labor in supply chains, and the ever-growing mountain of single-use plastics was affecting the ability of companies to create value in the long run. How these trends are changing markets, affecting brand value, or if not managed, simply increasing risk.
Focusing on financial material ESG issues was a good place to start, as it was closer to the heart of fund managers, and did not have any impact on their investment universe. This leaves the most room to create alpha according to the good old fundamental law of active management. However, 10 years on, we see that our clients, the regulator and society are moving towards focusing on the actual (negative) impact our investments have. This is adding another dimension to analyzing companies and constructing portfolios: return, risk and social and environmental impact.
So, we see the fund manager 2.0 as a professional who can take a carbon budget into account as well as a tracking error and alpha. Someone who understands that decarbonization through time is a given, and that negative externalities (like waste or carbon emittance) should be priced. Because policy makers will push for externality pricing, while stranded assets are the minefields of the coming years.
The fund manager 2.0 understands that real world impact via our investments is equally important, in some products at least, to generating alpha. Taking into account real world impact is the future.
Combining these efforts is a whole new challenge. Not adapting will make you extinct.
1 CFA Institute, Investment professional of the future, May 2019
2 Please refer to the insight “Applying big data to investment processes”, Robeco website
The contents of this document have not been reviewed by the Securities and Futures Commission ("SFC") in Hong Kong. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document has been distributed by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the SFC in Hong Kong.
This document has been prepared on a confidential basis solely for the recipient and is for information purposes only. Any reproduction or distribution of this documentation, in whole or in part, or the disclosure of its contents, without the prior written consent of Robeco, is prohibited. By accepting this documentation, the recipient agrees to the foregoing
This document is intended to provide the reader with information on Robeco’s specific capabilities, but does not constitute a recommendation to buy or sell certain securities or investment products. Investment decisions should only be based on the relevant prospectus and on thorough financial, fiscal and legal advice. Please refer to the relevant offering documents for details including the risk factors before making any investment decisions.
The contents of this document are based upon sources of information believed to be reliable. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
Investment Involves risks. Historical returns are provided for illustrative purposes only and do not necessarily reflect Robeco’s expectations for the future. The value of your investments may fluctuate. Past performance is no indication of current or future performance.
Please read this information carefully.
This website is prepared and issued by Robeco Hong Kong Limited ("Robeco"), which is a corporation licensed by the Securities and Futures Commission in Hong Kong to engage in Type 1 (dealing in securities); Type 4 (advising in securities) and Type 9 (asset management) regulated activities. The Company does not hold client assets and is subject to the licensing condition that it shall seek the SFC’s prior approval before extending services at retail level. This website has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.
2. Important risk disclosures
2. Important risk disclosures Robeco Capital Growth Funds (“the Funds”) are distinguished by their respective specific investment policies or any other specific features. Please read carefully for the risks of the Funds:
3. Local legal and sales restrictions
The information contained in the Website is being provided for information purposes.
Neither information nor any opinion expressed on the Website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. The information contained in the Website does not constitute investment advice or a recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, most recent annual and semi-annual reports, which can be all be obtained free of charge at www.robeco.com/hk/en and at the Robeco Hong Kong office.
4. Use of the Website
The information is based on certain assumptions, information and conditions applicable at a certain time and may be subject to change at any time without notice. Robeco aims to provide accurate, complete and up-to-date information, obtained from sources of information believed to be reliable. Persons accessing the Website are responsible for their choice and use of the information.
5. Investment performance
No assurance can be given that the investment objective of any investment products will be achieved. No representation or promise as to the performance of any investment products or the return on an investment is made. The value of your investments may fluctuate. The value of the assets of Robeco investment products may also fluctuate as a result of the investment policy and/or the developments on the financial markets. Results obtained in the past are no guarantee for the future. Past performance, projection, or forecast included in this Website should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Fund performance figures are based on the month-end trading prices and are calculated on a total return basis with dividends reinvested. Return figures versus the benchmark show the investment management result before management and/or performance fees; the fund returns are with dividends reinvested and based on net asset values with prices and exchange rates of the valuation moment of the benchmark.
Investments involve risks. Past performance is not a guide to future performance. Potential investors should read the terms and conditions contained in the relevant offering documents and in particular the investment policies and the risk factors before any investment decision is made. Investors should ensure they fully understand the risks associated with the fund and should also consider their own investment objective and risk tolerance level. Investors are reminded that the value and income (if any) from shares of the fund may be volatile and could change substantially within a short period of time, and investors may not get back the amount they have invested in the fund. If in doubt, please seek independent financial and professional advice.
6. Third party websites
This website includes material from third parties or links to websites maintained by third parties some of which is supplied by companies that are not affiliated to Robeco. Following links to any other off-site pages or websites of third parties shall be at the own risk of the person following such link. Robeco has not reviewed any of the websites linked to or referred to by the Website and does not endorse or accept any responsibility for their content nor the products, services or other items offered through them. Robeco shall have no liability for any losses or damages arising from the use of or reliance on the information contained on websites of third parties, including, without limitation, any loss of profit or any other direct or indirect damage. Third party off-site pages or websites are provided for informational purposes only.
7. Limitation of liability
Robeco as well as (possible) other suppliers of information to the Website accept no responsibility for the contents of the Website or the information or recommendations contained herein, which moreover may be changed without notice.
Robeco assumes no responsibility for ensuring, and makes no warranty, that the functioning of the Website will be uninterrupted or error-free. Robeco assumes no responsibility for the consequences of e-mail messages regarding a Robeco (transaction) service, which either cannot be received or sent, are damaged, received or sent incorrectly, or not received or sent on time.
Neither will Robeco be liable for any loss or damage that may result from access to and use of the Website.
8. Intellectual property
All copyrights, patents, intellectual and other property, and licenses regarding the information on the Website are held and obtained by Robeco. These rights will not be passed to persons accessing this information.
10. Applicable law
The Website shall be governed by and construed in accordance with the laws of Hong Kong. All disputes arising out of or in connection with the Website shall be submitted to the exclusive jurisdiction of the courts of Hong Kong.