Asia Portfolio - Constructive on Asia equities into Y2020

ETF-based digiPortfolio

4Q 2019 Slow n Steady Comfy Cruisin Fast n Furious
Asia Portfolio SGD 2.0% 4.5% 6.0%
Global Portfolio SGD 1.1% 2.7% 4.4%

The above table is based on the Indicative Model Portfolio gross of fees returns.
Individual performance may vary.

Asia Portfolio - Constructive on Asia equities into Y2020

Looking into 2020, we stay constructive on Asia equity markets given stabilising economic growth, supportive monetary policies and still cheaper valuations compared to developed markets.

Fundamentally, Asian corporates’ balance sheets have also improved considerably providing the potential for a higher dividend payout. Geographically, we currently like China equities for its cheap valuations and believe that growth fears may be overdone. Although Chinese GDP growth has slowed, the economy is becoming more resilient with a strong focus on better balance sheets. India remains an attractive long-term growth story although near-term overhangs such as economic slowdown and geopolitical concerns may linger.

We continue to like Singapore equities for its high-yielding characteristics as a defensive buffer to the portfolios. In fixed income, we remained focused on investment grade credit with shorter duration.

Global Portfolio - Combination of factors likely to support investor sentiment into Y2020

Broadly speaking as we look into 2020, we believe that the combination of economic stabilisation, trade de-escalation and a clearer Brexit strategy may likely support investor sentiment. Key global central banks are also trying to stimulate growth through supportive monetary policies, providing a favourable backdrop for equities.

We currently favour US equities because of its healthy economic backdrop, strong corporate profitability, and supportive monetary policies. We also favour Asia equities for its higher growth potential and cheaper valuations compared to developed market equities. Over the near term, Asia markets could potentially be helped by a pause in the US-China trade war as corporate earnings momentum stabilizes.

For fixed income, we expect a gradual steepening of the US treasury yield curve and stay moderately underweight duration as such. We favour taking credit risk as growth stabilizes and are invested mainly in developed markets and emerging markets credits for yield pick-up.

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