The result of a year-long study and rigorous testing across 120,000 portfolios, the framework aims to deliver more consistent and risk-aware returns for investors.
Bank of Singapore has launched a new systematic, robust and risk-based Strategic Asset Allocation (SAA) framework designed to help clients build resilient, long-term investment portfolios.
The launch of the SAA framework comes at a time when global markets are experiencing heightened volatility. The VIX Index, a key measure of market uncertainty, reached its highest level in five years in April 2025 – levels close to what was last seen during the Covid-19 pandemic. Since 2022, both equities and bonds indices have posted negative returns in tandem more frequently, a rare occurrence that challenges traditional portfolio assumptions, underscoring the need for portfolio resilience.
Developed by Bank of Singapore’s Chief Investment Office after a year-long study and stress testing of 120,000 portfolios, the framework adopts a “robust optimisation” technique that aims to create investment portfolios adapted to withstand uncertainties in market conditions and key inputs, such as expected returns and risks, thereby delivering more stable returns. This is the latest in a concerted series of moves by the Bank to enhance its investment portfolio advisory capabilities.
This is the first time that an Asian private bank has used the robust optimisation technique to design a strategic asset allocation framework, which is typically utilised by quantitative hedge funds and institutional investors. The technique comes with the analytical rigour required for managing long-term wealth portfolios.
The launch is also a reflection of a broader shift as investors become more sophisticated and seek portfolio-led solutions rather than product-driven offerings, and value expert guidance tailored to their goals, risk appetite, and market outlook.
Robust optimisation addresses the limitations of two common techniques used by private banks: mean-variance optimisation (MVO) and market cap-weighted benchmarks. It promotes greater diversification across asset classes to reduce risks and focuses on minimising the potential loss in the worst-case scenario to reduce the performance gap between expected (best-case) and worst-case scenarios.
In contrast, MVO – which requires accurate forecasts – typically underperforms when actual market conditions diverge from forecasts. Meanwhile, portfolios constructed using the market cap-weighted benchmarks approach tend to be heavily concentrated in the US market, which can be less than ideal in today’s environment.
Portfolio construction techniques
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Robust Optimisation (RO) |
Mean-variance optimisation (MVO) |
Market cap-weighted benchmarks |
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Crisis resilience |
High (Designed for stress tolerance) |
Low/ Moderate
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Low (Concentrated in risky assets) |
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Typical Portfolio characteristics |
· More diversified across asset classes and portfolios · More stable and predictable; less susceptible to volatility · Resilient across “economic regimes”
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· Allocations can be concentrated in a few asset classes · Susceptible to higher volatility
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· The benchmark is heavily concentrated in the US market which is currently overvalued; using benchmarks can lead to overconcentrated portfolios |
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Key trade-offs |
· May sacrifice some expected return for resilience
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· Requires frequent rebalancing |
· Ignores risk appetite and return objectives of investors |
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Best used when |
· Market uncertainty is high, and investor resilience is critical
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· There is high degree of market certainty |
· Passive investing is the main objective |
The new SAA framework is now applied in the design of portfolios across five risk profiles – conservative, moderate, balanced, growth, and aggressive – with recommended allocations across asset classes such as equities, fixed income, cash, and alternative investments.
The year-long study and testing of 120,000 portfolios was led by Chief Portfolio Strategist, Dr. Owi S. Ruivivar, who joined Bank of Singapore in 2024 to solidify its strategic focus on cross-asset research, asset allocation and portfolio management.
Ms Jean Chia, Global Chief Investment Officer, Bank of Singapore, said: “This is an opportune time to rethink how we build portfolios. Traditional models depend on accurate forecasts, which are increasingly harder to make in today’s uncertain environment, where market cycles are becoming more unpredictable and volatile. Our new framework offers portfolios more resilience, helping clients navigate uncertainty with more clarity. This is how we provide long-term value to our clients.”
Quality investment and portfolio advisory as a key differentiator
Quality investment and portfolio advisory is at the forefront of Bank of Singapore’s strategy and the launch of the new strategic asset allocation framework is part of a concerted effort to differentiate the Bank.
This includes the new additions to its CIO Global Advisory Council (CIO GAC), which was first established in 2024 to augment the Bank’s thought leadership capabilities and investment insights. The CIO GAC convenes renowned global thought leaders and experts of leading think tanks and asset managers. Four new members joined in 2025 – Dr. Guo Kai, Executive President and Senior Fellow, CF40 Institute; Mr John Emerson, former US ambassador to Germany and Vice Chair, Capital International; Mr Joseph Zidle, Chief Investment Strategist, Blackstone Private Wealth; and Mr Torsten Slok, Chief Economist and Partner, Apollo Global Management.
The hiring of Chief Portfolio Strategist, Dr. Owi S Ruivivar, in 2024 to augment the bank’s portfolio advisory capabilities is another example of the bank’s efforts to differentiate itself. Dr Ruivivar is a seasoned investment manager with over 30 years of experience in economics, investment strategy and portfolio management. She joined from Singapore’s GIC where she spearheaded investment-oriented thematic research at the Economics and Investment Strategy department and led the Future Markets investing team, which oversaw multi-asset investments across private and public markets in frontier Emerging Markets countries.
