It is becoming a tug of war between the Federal Reserve and the market. Is a Fed taper on the cards for 2H21? The Fed is downplaying the extent of recent US recovery and deems the sharp rebound in inflation to be transitory. However, the bond market is suggesting otherwise, with the up move in bond yields. Coupled with rising prices, one can no longer be too certain that inflation’s rebound is just temporary.
For the quarter ahead, position your portfolio to reap the benefits of increased vaccination rollouts and continuing macroeconomic recovery. The DBS Chief Investment Office believes the rotation into equities has begun, and prefers Developed Market over Emerging Market equities.
For bonds, stay constructive on High Yield bonds. Also keep Asian credits in focus as they have strong underlying fundamentals.
The Barbell Index Note is anchored on the CIO Barbell Strategy – allocating assets to the highest conviction calls from a "Growth" and "Income" perspective.
The Growth component gains exposure to secular growth trends while the Income component looks for dividend equities, REITs, and corporate bonds.
Since inception, the Barbell Index has returned 31.8% net of fees, outperforming the composite benchmark’s 23.4% return by 640 bps.
The Barbell Income Fund takes a multi-asset investing approach. Apart from corporate bonds, the strategy also seeks to enhance portfolio yield through exposure to high dividend stocks and call option writing on growth stocks.
This approach provides greater opportunities and diversification benefits for investors seeking sustainable cash flow in today's low-yielding world.
Since inception on 17 March 2021 to 25 June 2021, the Barbell Income Fund has shown total return of 3.04%. The Fund is on-track to pay its maiden quarterly dividend in July.
Please contact your RM for more information on the product ideas.
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