A multi-income journey into the emerging high-yield potential
Income investors like us have stayed the course as we ride through the four seasons. Where do we see income opportunities?
Aug 2020 (3-minute read)
What’s happening in the current market?
The USD has been on a downtrend since March 2020, with the USD index having dropped about 9% since then1.
Why did the USD weaken?
What does a weak USD mean for investments2?
The depreciation of the USD is a key factor in driving asset class performance, but it isn’t the only reason. Hence, asset allocation decisions shouldn’t be made purely based on the strength or weakness of the greenback.
1. A weak USD generally coincides with Asian equities outperformance1
A weak USD can generally create opportunities for risk assets, as this usually happens when broad-based risk appetite in the market increases and the global economy is in expansion. This is a relatively positive environment for EM and Asian assets, both in fixed income and equities.
Periods of USD weakness generally coincide with Asian equities outperformance1 relative to developed markets.
Past performance is not a reliable indicator of current and future results. Provided for illustrative purposes only to demonstrate generic market trends.
2. Lower currency risks
A weak USD can help manage currency risks2 when investing in emerging markets and Asia, allowing central banks to focus on growth instead of keeping interest rates high to defend their currencies.
How we seek to capture Asia’s growth opportunities3?
The global public health crisis has accelerated some structural trends in Asia even as the region’s long-term growth trends remain generally intact. As global growth starts to recover, the economic fallout from the crisis is likely to persist.
Against this backdrop, how can investors capture the region’s growth opportunities while navigating potential bouts of volatility?
Capitalise on Asia’s long-term structural changes
Lifestyle upgrades: rising income is driving consumption demand
Demographic change: population structure transformation is creating broader investment opportunities
Financial deepening: regional economic development is bolstering demand for wealth management services
A high-conviction strategy with quality and growth
Quality: fundamental, bottom-up, research-driven approach
Growth: focuses on profitable companies with sustainable return potential and growth prospects
Conclusion
A weak USD has helped create opportunities for EM and Asian assets. A bottom-up fundamental research focus can help identify quality Asian corporates and capture potential long-term investment opportunities.
Provided for information only based on market conditions as of date of publication, not to be construed as investment recommendation or advice. Forecasts/ estimates may or may not come to pass.
1. Source: FactSet, MSCI, J.P. Morgan Asset Management, US Federal Reserve. AxJ = Asia ex-Japan; DM = Developed markets. *REER is the real effective exchange rate. Past performance is not a reliable indicator of current and future results. Data reflect most recently available as of 18.08.2020. Indices do not include fees or operating expenses and are not available for actual investment.
2. Risk management does not imply elimination of risk.
3. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
Investment involves risk. Not all investments are suitable for all investors. Past performance is not a reliable indicator of current and future results. Please refer to the offering document(s) for details, including the risk factors. Investors should consult professional advice before investing. Investments are not similar to or comparable with fixed deposits. The opinions and views expressed here are as of the date of this publication, which are subject to change and are not to be taken as or construed as investment advice. Estimates, assumptions and projections are provided for information only and may or may not come to pass. This document has not been reviewed by the SFC. Issued by JPMorgan Funds (Asia) Limited.
Income investors like us have stayed the course as we ride through the four seasons. Where do we see income opportunities?
As the year begins, consider a 2021 list of China A-share ideas as you devise a plan for your investment portfolio?
How much do you know about income investing amid an evolving market environment?
Uneven recoveries in 2021 would imply the need for more active management.
As market volatility could persist in 2021, how can investors cut through the fog of uncertainty?
How a ‘new normal’ could shape investing in equities, fixed income and multi-asset solutions.
What are the investment implications of China’s new economic blueprint and the US elections?
We share our views on how the public health crisis has accelerated some structural growth trends in Asia.
We share our perspectives on potential opportunities arising from evolving consumer behaviours.
We share our perspectives on riding the wave for future growth in tech investing.
With less than a month to go before the US elections, we look at the investment implications for 5 major economic sectors.
A persistent and flexible strategy has become more important ever in seeking income.
Looking at China’s economic recovery and the beneficiaries in the long term.
The potential opportunities and risks in bonds in the last stretch of 2020.
Let’s explore the role securitised debt could play in an investment portfolio.
Understand stock valuations for clues to potential opportunities in a market rally.
As China’s property market recovers, capture income potential of Chinese property bonds with a diversified Asian bond strategy.
Understand bond credit rating and broaden potential income opportunities.
With the Fed’s new policy framework, where do we see opportunities in Asia?
Actively manage local currency opportunities in an Asian bond portfolio.
Asia’s bond markets have grown significantly over the past decade, spanning a diverse range that offers investors more fixed income options.
Our portfolio manager shares her views on potential quality growth and A-Shares as China enters a new normal.
Income opportunties can still be found in Asia’s bond markets amid low rates as they are supported by these three factors.
The Asian bond market has grown significantly in the past decade. Explore the abundant opportunities.
In the zero interest rate era, what are the income opportunities in Chinese bonds?
Amid China’s long-term structural growth trends, which are the sectors that could stand out in the A-Share market?
Expand your sources of income by considering the potential opportunities in Chinese bonds.
Structural growth trends in Asia remain intact amid the pandemic and some have actually been accelerated.
As the search for income gets tougher, consider the world of Chinese bonds to diversify your income opportunity set.
Striving to optimise potential equity income opportunities as markets recover.
We describe three case scenarios for economic recovery after the pandemic subsides.
Positioning to tap bond market opportunities as economies reboot as the pandemic subsides.
As liquidity conditions improved, our portfolio manager shares how we are positioned for income opportunities across asset classes.
US technology sector looks set to benefit from emerging trends driven by the pandemic.
Our income strategy portfolio manager shares how he looks through the headlines and focuses on the long term.
China’s long-term structural trends such as consumption upgrades, domestic technology and healthcare innovation are expected to remain intact amid the pandemic.
As the search for quality income gets challenging, a diversified multi-asset income solution could be considered to broaden income potential.
Diversifying across fixed income, with a quality tilt, could help build portfolio resilience.
A diversified portfolio with a defensive bias could help build portfolio resilience while seeking yield opportunities.
The limited impact of COVID-19 on APAC’s technology industry chain in the medium to long term.
Diversify your income sources to help navigate uncertain markets.
Investing across multiple fixed income sectors could help navigate uncertain markets and seek yield in fixed income.
Our multi-asset fund manager shares how he repositions for income in uncertain times.
Some investing ‘dos & don’ts’ as you navigate market volatility in uncertain times.
As COVID-19 continues to evolve, our strategists share 4 topmost concerns among Asia’s investors.
China’s economic fundamentals remain resilient as the country races to contain an evolving health crisis.
As you welcome the Year of the Rat, plan to make your “lucky money” work harder for you.
Yield can still be found in a low rate environment but requires moving along the risk spectrum.
Time to reposition fixed income as the economy bottoms out and recession risk wanes.
Lower returns from bonds could pose a challenge to long-term investors.
Fixed income isn’t just government or corporate bonds, it also includes non-traditional debt securities.
The securitisation market has regained much ground in the past decade.
Diversification sounds easy, but how to do it effectively?
For more information, please call or email us. You can also contact your J.P. Morgan representative.