In June 2025, Bank of Singapore (BOS) announced a major overhaul of its strategic asset allocation (SAA) framework, introducing a robust new approach to portfolio construction. For international investors, family offices, and business owners considering Singapore as a wealth management base, this move is not just another product update — it signals a deeper shift in how leading financial institutions manage risk and returns amid a rapidly evolving global market.
This article provides an in-depth overview of BOS’s new approach, how it compares to traditional models, what it means for wealth owners, and how Singapore’s evolving standards stack up against other leading jurisdictions.
Navigating a New World of Risk
For decades, private banks around the world followed similar rules for portfolio construction: diversify across stocks, bonds, and perhaps a dash of alternative assets, with allocations guided by models developed in the 1950s and 60s. At the heart of these models was “mean-variance optimisation” (MVO), which tries to maximise expected returns for a given level of risk. Yet as recent history has shown, these traditional approaches often fail when confronted with real-world uncertainty — from the COVID crash and inflation shocks to geopolitical turbulence and the tech sector’s ups and downs.
Classic MVO portfolios work well only if market forecasts are reasonably accurate. But what happens when inflation spikes unexpectedly, the US market stumbles, or a “black swan” event upends conventional wisdom? Too often, portfolios built on yesterday’s assumptions deliver disappointing results when investors need protection most. Furthermore, global indices are heavily weighted toward the US, meaning many “diversified” portfolios end up concentrated in just one market.
A Paradigm Shift: BOS’s Robust Optimisation Approach
Bank of Singapore’s newly unveiled strategic asset allocation (SAA) framework is a response to these shortcomings. Instead of betting on a single set of forecasts, BOS spent a year running over 120,000 simulations and “stress tests,” exploring what would happen to different portfolios in the very worst scenarios — not just the best.
The result is a robust optimisation methodology that seeks to narrow the gap between a portfolio’s expected and worst-case outcomes. Unlike traditional models that chase top performance in good years, this approach prioritises consistency and resilience. It forces greater diversification, reducing overexposure to any single country or asset class, and actively seeks to limit losses during periods of severe market stress.
According to Dr. Owi Ruivivar, Chief Portfolio Strategist at BOS, the aim is simple: “Help our clients achieve their long-term goals by building portfolios that can survive the storms as well as enjoy the sunshine.”
Before and After: What Changes for Investors
To see the impact of BOS’s new framework, consider how a typical international family office portfolio might look under the old and new regimes.
Under the old model – still used by many banks in Switzerland, the UK, and even Hong Kong – a global balanced portfolio might allocate 60% to equities (with 40% or more in the US), 30% to bonds, and 10% to alternatives or cash. The rationale was that this mix, optimized for average market conditions, would provide both growth and stability.
But in reality, as the years 2022–2023 demonstrated, such portfolios were vulnerable to sharp swings in US tech stocks and the bond market’s worst year in decades. Investors with a US-centric allocation saw drawdowns of 15% or more, and some family offices needed to reconsider their approach to risk.
Under the new robust optimisation model, the allocation becomes more flexible and regionally diversified. For example, the equity portion might be reduced to 30–35%, with less exposure to the US and greater allocation to Asia and other emerging markets. Bonds would be split between developed market government debt and Asian/EM credit. Alternative assets (private equity, hedge funds, real estate, infrastructure) might make up a quarter of the portfolio. Cash and short-term instruments are included for liquidity and tactical opportunities.
The effect? In stress tests and recent turbulent years, such diversified portfolios have demonstrated smaller losses and faster recovery times. For the family office principal or next-generation wealth holder, this means less sleepless nights and more time focusing on long-term ambitions, rather than reacting to the latest headlines.
This article provides an in-depth overview of BOS’s new approach, how it compares to traditional models, what it means for wealth owners, and how Singapore’s evolving standards stack up against other leading jurisdictions.
Navigating a New World of Risk
For decades, private banks around the world followed similar rules for portfolio construction: diversify across stocks, bonds, and perhaps a dash of alternative assets, with allocations guided by models developed in the 1950s and 60s. At the heart of these models was “mean-variance optimisation” (MVO), which tries to maximise expected returns for a given level of risk. Yet as recent history has shown, these traditional approaches often fail when confronted with real-world uncertainty — from the COVID crash and inflation shocks to geopolitical turbulence and the tech sector’s ups and downs.
Classic MVO portfolios work well only if market forecasts are reasonably accurate. But what happens when inflation spikes unexpectedly, the US market stumbles, or a “black swan” event upends conventional wisdom? Too often, portfolios built on yesterday’s assumptions deliver disappointing results when investors need protection most. Furthermore, global indices are heavily weighted toward the US, meaning many “diversified” portfolios end up concentrated in just one market.
A Paradigm Shift: BOS’s Robust Optimisation Approach
Bank of Singapore’s newly unveiled strategic asset allocation (SAA) framework is a response to these shortcomings. Instead of betting on a single set of forecasts, BOS spent a year running over 120,000 simulations and “stress tests,” exploring what would happen to different portfolios in the very worst scenarios — not just the best.
The result is a robust optimisation methodology that seeks to narrow the gap between a portfolio’s expected and worst-case outcomes. Unlike traditional models that chase top performance in good years, this approach prioritises consistency and resilience. It forces greater diversification, reducing overexposure to any single country or asset class, and actively seeks to limit losses during periods of severe market stress.
According to Dr. Owi Ruivivar, Chief Portfolio Strategist at BOS, the aim is simple: “Help our clients achieve their long-term goals by building portfolios that can survive the storms as well as enjoy the sunshine.”
Before and After: What Changes for Investors
To see the impact of BOS’s new framework, consider how a typical international family office portfolio might look under the old and new regimes.
Under the old model – still used by many banks in Switzerland, the UK, and even Hong Kong – a global balanced portfolio might allocate 60% to equities (with 40% or more in the US), 30% to bonds, and 10% to alternatives or cash. The rationale was that this mix, optimized for average market conditions, would provide both growth and stability.
But in reality, as the years 2022–2023 demonstrated, such portfolios were vulnerable to sharp swings in US tech stocks and the bond market’s worst year in decades. Investors with a US-centric allocation saw drawdowns of 15% or more, and some family offices needed to reconsider their approach to risk.
Under the new robust optimisation model, the allocation becomes more flexible and regionally diversified. For example, the equity portion might be reduced to 30–35%, with less exposure to the US and greater allocation to Asia and other emerging markets. Bonds would be split between developed market government debt and Asian/EM credit. Alternative assets (private equity, hedge funds, real estate, infrastructure) might make up a quarter of the portfolio. Cash and short-term instruments are included for liquidity and tactical opportunities.
The effect? In stress tests and recent turbulent years, such diversified portfolios have demonstrated smaller losses and faster recovery times. For the family office principal or next-generation wealth holder, this means less sleepless nights and more time focusing on long-term ambitions, rather than reacting to the latest headlines.
Family Offices: A Closer Look by Type
1. Entrepreneurial First-Generation Family Office
Scenario:
A technology founder sells their company and moves capital to Singapore, establishing a Single Family Office (SFO). The primary goals: capital preservation, moderate growth, readiness to deploy funds for new ventures.
Traditional approach:
Heavy reliance on a trusted banker, portfolio dominated by public equities and tech stocks, some real estate, minimal alternatives.
BOS’s robust framework:
Result:
In 2022’s tech drawdown, the traditional portfolio drops 18%, while the robust portfolio limits losses to 8–10% and rebounds faster, giving the family greater confidence and flexibility.
2. Multi-Generational Family Office
Scenario:
An established European industrial family moves part of its office to Singapore for Asia-Pacific expansion, with three generations of beneficiaries, multiple trusts, and complex governance.
Traditional approach:
Portfolio “home bias” — over-concentration in European/US assets, fixed income, and local private equity. Legacy positions are rarely reviewed for risk.
BOS’s robust framework:
Result:
The family navigates both market turbulence and generational transitions with less internal conflict, and reporting helps build trust among younger members. Scenario planning improves decision-making around major distributions or liquidity events.
3. Investment-Oriented Family Office
Scenario:
A Hong Kong-based SFO seeks higher returns by aggressively allocating to hedge funds, venture capital, and leveraged strategies.
Traditional approach:
Aggressive risk/return profile, high drawdown potential, “winner’s curse” in hot markets.
BOS’s robust framework:
Result:
During years of market dislocation, overall wealth is protected even as some high-octane bets disappoint. The family’s ability to “survive to invest another day” is enhanced, supporting long-term growth without catastrophic setbacks.
Trusts: Adapting to New Fiduciary Standards
1. Discretionary Trusts
Scenario:
A Singapore-domiciled discretionary trust holds global assets for future generations, with income distributions for beneficiaries as needed.
Traditional approach:
Portfolio managed by trustees on a “prudent investor” basis, typically using legacy models or replicating private banking benchmarks.
BOS’s robust framework:
Result:
Beneficiaries are better protected against “permanent impairment” from market crises. Trustees can document a clear, evidence-based process if their investment decisions are ever scrutinized.
2. Purpose Trusts / Philanthropic Trusts
Scenario:
A trust established for charitable purposes or to fund a foundation, with a perpetual time horizon.
Traditional approach:
Conservative allocation, often cash and bonds, limited growth potential, high inflation risk.
BOS’s robust framework:
Result:
Trust achieves both stability and capital appreciation, ensuring endowments last and mission goals are met even during economic stress.
3. Reserved Powers Trusts / Protector-Led Trusts
Scenario:
A family principal retains oversight via a protector or reserved powers clause, especially for investment decisions.
Traditional approach:
Investment decisions are often reactive or depend on the protector's views, leading to concentration risk or ad hoc changes.
BOS’s robust framework:
Result:
Principal feels more in control without micromanaging, while professional trustees have cover for fiduciary compliance.
1. Entrepreneurial First-Generation Family Office
Scenario:
A technology founder sells their company and moves capital to Singapore, establishing a Single Family Office (SFO). The primary goals: capital preservation, moderate growth, readiness to deploy funds for new ventures.
Traditional approach:
Heavy reliance on a trusted banker, portfolio dominated by public equities and tech stocks, some real estate, minimal alternatives.
BOS’s robust framework:
- Reduces tech and US market overexposure.
- Increases allocation to Asian credit, private equity, real assets, and defensive alternatives.
- Provides “stress-test” transparency: principal sees simulations of worst-case drawdowns.
- Cash and tactical liquidity are built-in, so new investments can be made quickly.
Result:
In 2022’s tech drawdown, the traditional portfolio drops 18%, while the robust portfolio limits losses to 8–10% and rebounds faster, giving the family greater confidence and flexibility.
2. Multi-Generational Family Office
Scenario:
An established European industrial family moves part of its office to Singapore for Asia-Pacific expansion, with three generations of beneficiaries, multiple trusts, and complex governance.
Traditional approach:
Portfolio “home bias” — over-concentration in European/US assets, fixed income, and local private equity. Legacy positions are rarely reviewed for risk.
BOS’s robust framework:
- Periodic risk audits with worst-case modelling — allowing senior family members to visualise the impact of market shocks.
- Shifts part of the allocation to Asian growth sectors, EM bonds, and global infrastructure.
- Integrates ESG and impact investments for next-gen interests.
- Trust-linked portfolios are tailored by beneficiary profile (age, risk appetite, income needs).
Result:
The family navigates both market turbulence and generational transitions with less internal conflict, and reporting helps build trust among younger members. Scenario planning improves decision-making around major distributions or liquidity events.
3. Investment-Oriented Family Office
Scenario:
A Hong Kong-based SFO seeks higher returns by aggressively allocating to hedge funds, venture capital, and leveraged strategies.
Traditional approach:
Aggressive risk/return profile, high drawdown potential, “winner’s curse” in hot markets.
BOS’s robust framework:
- Models worst-case scenarios for illiquid assets and high-beta strategies.
- Caps risk exposure in portfolio “hot spots” (e.g., tech, crypto, China A-shares).
- Integrates volatility-controlled products and dynamic hedging.
- Emphasizes rebalancing discipline, so rapid market shifts don’t lead to outsize losses.
Result:
During years of market dislocation, overall wealth is protected even as some high-octane bets disappoint. The family’s ability to “survive to invest another day” is enhanced, supporting long-term growth without catastrophic setbacks.
Trusts: Adapting to New Fiduciary Standards
1. Discretionary Trusts
Scenario:
A Singapore-domiciled discretionary trust holds global assets for future generations, with income distributions for beneficiaries as needed.
Traditional approach:
Portfolio managed by trustees on a “prudent investor” basis, typically using legacy models or replicating private banking benchmarks.
BOS’s robust framework:
- Trustees receive advanced analytics showing not just expected returns but loss probabilities in severe markets.
- Asset allocation policy statements are updated to require robust diversification.
- Trustees demonstrate to regulators/courts a duty of care aligned with global best practice (important if trust is challenged).
Result:
Beneficiaries are better protected against “permanent impairment” from market crises. Trustees can document a clear, evidence-based process if their investment decisions are ever scrutinized.
2. Purpose Trusts / Philanthropic Trusts
Scenario:
A trust established for charitable purposes or to fund a foundation, with a perpetual time horizon.
Traditional approach:
Conservative allocation, often cash and bonds, limited growth potential, high inflation risk.
BOS’s robust framework:
- Incorporates real assets and global diversification to hedge against inflation and local currency devaluation.
- Robust modelling aligns distributions with sustainable “safe withdrawal” rates, preserving purchasing power for the long term.
- Impact/ESG investments included per mission alignment.
Result:
Trust achieves both stability and capital appreciation, ensuring endowments last and mission goals are met even during economic stress.
3. Reserved Powers Trusts / Protector-Led Trusts
Scenario:
A family principal retains oversight via a protector or reserved powers clause, especially for investment decisions.
Traditional approach:
Investment decisions are often reactive or depend on the protector's views, leading to concentration risk or ad hoc changes.
BOS’s robust framework:
- Offers protector/settlor access to stress-test dashboards, enabling data-driven oversight.
- Portfolio rules can cap concentration and enforce diversification by design.
- “Robust” portfolio management helps avoid emotional or biased decision-making.
Result:
Principal feels more in control without micromanaging, while professional trustees have cover for fiduciary compliance.
Singapore: A New Benchmark for Wealth Structures
Regulatory environment: Singapore offers clear, pro-business regulation and a range of trust/family office vehicles (including Variable Capital Company, VCC) and world-class banking infrastructure.
Taxation: No tax on foreign-sourced income for trusts and family offices, subject to conditions. By contrast, the UK, Switzerland, and US often impose taxes on worldwide income.
Innovation: Singaporean banks and trustees now use robust optimisation, while many Western peers remain wedded to legacy models, exposing clients to greater downside in crises.
Access to Asia: Singapore is uniquely positioned to invest directly into Asia-Pacific growth, providing both risk-adjusted returns and strategic business advantages.
Practical Recommendations
NB! The information provided in this article is for general informational purposes only and does not constitute legal advice. While we strive to ensure the content is accurate and up-to-date, it should not be relied upon as a substitute for professional consultation. For personalized advice or assistance with legal matters, please contact our specialists directly.
Regulatory environment: Singapore offers clear, pro-business regulation and a range of trust/family office vehicles (including Variable Capital Company, VCC) and world-class banking infrastructure.
Taxation: No tax on foreign-sourced income for trusts and family offices, subject to conditions. By contrast, the UK, Switzerland, and US often impose taxes on worldwide income.
Innovation: Singaporean banks and trustees now use robust optimisation, while many Western peers remain wedded to legacy models, exposing clients to greater downside in crises.
Access to Asia: Singapore is uniquely positioned to invest directly into Asia-Pacific growth, providing both risk-adjusted returns and strategic business advantages.
Practical Recommendations
- Review Investment Policy Statements: Family offices and trustees should update IPS documents to explicitly reference robust optimisation, stress-testing, and downside risk controls.
- Demand Advanced Reporting: Insist on analytics that model worst-case scenarios, not just historical averages.
- Regularly Audit Diversification: Especially important for trusts with global beneficiaries, as geographic, sector, and currency risks evolve.
- Educate Stakeholders: Bring next-generation family members and protectors into the conversation on new risk management standards.
- Choose Partners Wisely: Work with banks, trustees, and asset managers who can deliver on robust, evidence-based portfolio management.
NB! The information provided in this article is for general informational purposes only and does not constitute legal advice. While we strive to ensure the content is accurate and up-to-date, it should not be relied upon as a substitute for professional consultation. For personalized advice or assistance with legal matters, please contact our specialists directly.
RSBU Group Expertise
We have extensive experience in providing legal and financial support in Singapore for over 13 years. From choosing the right tax scheme (Section 13O, 13U, or 13D) to structuring investments and ensuring compliance with Singapore’s regulations, our team provides end-to-end support. We assist with operational setup, hiring professionals, and developing long-term strategies for wealth preservation and growth. Whether you need help with establishing a Single Family Office (SFO) or scaling a Multi-Family Office (MFO), we offer the expertise and resources to make the process seamless and efficient.
We have extensive experience in providing legal and financial support in Singapore for over 13 years. From choosing the right tax scheme (Section 13O, 13U, or 13D) to structuring investments and ensuring compliance with Singapore’s regulations, our team provides end-to-end support. We assist with operational setup, hiring professionals, and developing long-term strategies for wealth preservation and growth. Whether you need help with establishing a Single Family Office (SFO) or scaling a Multi-Family Office (MFO), we offer the expertise and resources to make the process seamless and efficient.