Year ahead 2021: seeking clarity amid macro uncertainty
As market volatility could persist in 2021, how can investors cut through the fog of uncertainty?
“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
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.
Changes in consumer behaviour, such as ecommerce and tourism demand, are driving cross-sector growth
Demand is growing for savings products, pension plans and insurance
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.
Adopting a fundamental, bottom-up, research-driven approach
Focusing on profitable companies with sustainable return potential and growth prospects
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.