How are the funds selected by Endowus? (HK)

We place paramount importance on selecting the Best-in-Class fund managers to partner with, and have leveraged data and technology to build a rigorous framework for manager and product due diligence. Fund selection and due diligence are done by our Investment Office team that is led by our Group Chief Investment Officer, Samuel Rhee, Former CEO and CIO of Morgan Stanley Investment Management Asia, with 26 years of industry experience and previously managed $20 billion in institutional assets.

We start by working in close partnership with major global fund managers to bring you the Best-in-Class products to build your portfolios. We then apply a robust selection criteria to a shortlisted curation of funds across asset classes, geographies, sectors, themes and factors.

Quantitative screens and qualitative assessments are used to find funds that have demonstrated outperformance in their peer group and benchmarks over various periods of time, but have also demonstrated good risk management practice.

We also assess and weigh a fund’s performance consistency, volatility and downside risk relative to their peer group and benchmarks. Additionally, we would generally require funds to have a track record of at least three years; although fund managers who have run similar strategies in the past may also be considered. Lastly, important factors like the size of the fund on which the track record was based and tax efficiency are considered as well.

If the fund passes our quantitative screens, we will look to better understand the fund’s investment process, team structure, portfolio implementation and risk control policies. Some of the factors we look at include how the fund breaks down its investment process, the background and experience of the investment team, and the fund’s risk management strategy.

Fees are also considered as they have a significant effect on long-term returns. To achieve this, we generally screen for funds with lower expense ratios and look for efficient trading and implementation. Excessive portfolio turnovers should be avoided as trading costs contribute to the expense ratio of the fund that investors would ultimately bear.

As we do not take trailer fees from the investment products on our platform (unlike most banks, brokers, advisors, and other online fund platforms), we always act in your best interest. Our goal is to access the best products at the lowest cost possible, so all of us can invest better for the future.

Read more about our proprietary fund selection framework here.

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