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?
“Don't fight the Fed” is a common saying in the market. Generally, the Fed’s take on policies is considered by some investors as an indicator of the market’s outlook. And recently, the Fed adjusted its monetary policy framework.
We share our views on three questions on the minds of investors about the investment implications of this new policy.
Q1. What do changes under the Fed’s new framework mean for investors?
Q2. As monetary easing persists, where could investors find opportunities in risk assets1?
APAC ex-Japan equities: earnings expectations by sector3
2. Source: Bloomberg Finance L.P., MSCI, J.P. Morgan Asset Management. Index used is MSCI AC Asia Pacific ex-Japan Index. Indices do not include any fees or operating expenses and are not available for actual investment. Past performance is not a reliable indicator of current or future results. Data reflect most recently available as of 30.06.2020.
3. Source: FactSet, MSCI, J.P. Morgan Asset Management. Sector indices used are from the MSCI AC Asia Pacific ex-Japan Index. Indices do not include any fees or operating expenses and are not available for actual investment. Consensus estimates used are calendar year estimates from FactSet. Provided for information only to illustrate general market trends, not to be construed as research or investment advice. Forecasts/ estimates are indicative and may or may not come to pass. Past performance is not a reliable indicator of current or future results. Data reflect most recently available as of 14.08.2020.
Q3. How do we seek to capture opportunities in Asian equities1?
1. Optimising opportunities across sectors
Asia’s growing middle class is driving long-term demand growth across sectors, independent of the economic cycle.
Lifestyle upgrades
Changes in consumer behaviour, such as ecommerce and tourism demand, are driving cross-sector growth
Financial deepening
Demand is growing for savings products, pension plans and insurance
Demographic change
The transformation of population structures is creating a wide range of opportunities, from consumer services to healthcare
2. Focusing on quality and growth
A professional investment team with local expertise and long-term experience in the region is well positioned to identify companies that we believe could benefit from Asia’s transformation trend.
Quality
Adopting a fundamental, bottom-up, research-driven approach
Growth
Focusing on profitable companies with sustainable return potential and growth prospects
Conclusion
As the US economy has seen its inflation running below target for an extended period of time, the latest shift implies the Fed is more tolerant of inflation and holding back on tightening monetary policy.
With US monetary policy likely to stay accommodative for even longer, we continue to see opportunities in Asian equities backed by long-term structural growth trends.
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. 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 or 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.