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New GRID for Asia after COVID-19 

DeGlobalisation - Amid geopolitical swings and weaker economic growth, the post-COVID world is expected to move towards deglobalisation, with looser trading ties and countries becoming more self-reliant.

Resumption of growth - Asia is expected to outpace developed territories with positive GDP growth for 2020, and further improvements in 2021.

Low Interest rate - We believe that the US Federal Reserve will keep interest rates lower for longer and the US dollar will remain under pressure. Given the inverse relationship between the US dollar and Asian equities, capital seeking a higher potential yield or total return may flow into Asian equities.

  • Better Income

    A “Better Income” approach seeks to understand an investor’s investment objective alongside the underlying risk of certain levels of income generation. “Better” income may not refer to the highest income level but the stability and consistency of reasonably higher yields generated throughout various market cycles.

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  • Dollar cost averaging and its benefits

    If investors wish to reduce volatility and benefit from long-term growth when the markets move up and down, the passive strategy of dollar cost averaging may be a feasible choice.

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  • Strike a balance in life, and most importantly, in your portfolio!

    A balanced asset allocation usually provides investors with a smoother investment experience and perhaps helps protect them from selling equities after they have already fallen in price. If you believe that we are likely to enter a period of further economic weakness, we’re likely to be reminded of the importance of bonds in a portfolio.

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1 World Trade Organisation (WTO), United Nations conference on trade and development (UNCTAD), September 2020. World merchandise trade volume index was rebased to 100 in 2005.

2 Organisation for Economic Co-operation and Development (OECD), 14 September 2020. Bloomberg, 14 October 2020. The information in this material may contain projections or other forward-looking statements regarding future events, targets, management discipline or other expectations, and is only as current as of the date indicated. There is no assurance that such events will occur, and may be signifcantly different than that shown here. The information in this material including statements concerning fnancial market trends, are based on current market conditions, which will fuctuate and may be superseded by subsequent market events or for other reasons. For illustration purposes only.

3 Bloomberg, as of 30 September 2020. Correlation is calculated based on monthly performance from 30 September 2015 to 30 September 2020. Asian equities are represented by MSCI AC Asia ex Japan gross total return USD index. Past performance is not indicative of future performance. Investors cannot invest directly in an index.

4 eMarketer, May 2020.

5 Gartner, July 2020.

6 Citi research, 4 October 2020.

 

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