Multiply your wealth with a global multi-asset fund
EVEN though there are improving economic signals from many countries and reflation is gaining momentum, we cannot deny that political risks remain and policy uncertainties are still driving the markets.
Moreover, there have still been several investment challenges for investors and, eventually, asset allocation and a flexible investment strategy are what investors should be concerned about as keys to make their wealth multiply.
First is “Income Challenge”. This is because the global bond yield remains low. It can be seen that bond yields have fallen across the board since 2008 and have hardly recovered to the satisfying levels as the pre-crisis period. Moreover, it’s forecast that the yield is expected to remain relatively stable for the next few years.
At the same time, deposit interest rate in many countries has fallen and stayed at the low level while some countries continue to run negative interest rates.
“Stability Challenge” is another factor that investors have to face due to the fact that volatility has been a key feature in global equity markets in recent years and continues to increase. Focusing on MSCI World Index and the MSCI Emerging Market Index from December 2013 to December 2016, it can be seen that both of them are still highly volatile. What is interesting is even global markets are clouded with volatility, investors around the world are still seeking an investment strategy that can beat the market and provide more stable returns over time.
The third challenge is “Growth Challenge”. There is some evidence that shows growth will be harder to find. Over the last two years, stock dividends have been quite stable while capital growth, mainly coming from multiple expansions, have been on a downward trend. Earning yields have been falling. Hence, picking stocks with good earnings growth is quite crucial for performance going forward.
Apart from the three challenges above, the investment climate is changing rapidly and has become more complex compared to the past. That’s why understanding the market movement, investing in the right market and at the right time are always the big challenges for investors.
Seeking growth, income and stability in this volatile world are the keys to overcome all the above challenges as well as to multiply your wealth in the long run.
It’s highly recommended to make your portfolio have a broad diversification. Investors should better invest in “Global Multi Asset”, which properly compound investing in equity for growth while investing in fixed income for income building and also include some opportunistic assets, such as infrastructure and real exchange investment trusts for stability. Besides, one should consider a flexible asset allocation strategy that is able to deliver a stable yield and less volatile returns in sluggish markets and able to generate growth returns in an uptrend market.
However, investor should understand that self-investment in global multi assets may have limitations in access to various asset class. Moreover, an effective analytical tool for profit-seeking in all global financial markets may be too costly for individual investors. Therefore, investing in a professionally managed global multi-asset fund would be the solution and investment choice. This fund would also benefit investors who lack the time to monitor market movements and are not skilled in timing strategy to overcome all above the challenges and achieve their wealth growth target.
All investments contains risks. Investors should thoroughly study prospectuses, product features, return conditions and risk before investing.
Contributed by Asset Plus Fund Management
