𝐑𝐞𝐟𝐥𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐅𝐢𝐱𝐞𝐝 𝐈𝐧𝐜𝐨𝐦𝐞 𝐋𝐞𝐚𝐝𝐞𝐫𝐬 𝐒𝐮𝐦𝐦𝐢𝐭 𝐀𝐏𝐀𝐂 🌏

Fantastic to have spent the day at the Fixed Income Leaders Summit APAC, gaining crucial insights into navigating the evolving fixed income landscape. The consensus points to a market deeply influenced by macro shifts, urging a move away from traditional biases.

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Here's a concise summary of the key takeaways focused on Risks, Opportunities, and Investment Strategy for Fixed Income:

⚠️ Risks & Warnings

🎈Policy Dominance: The primary risk in FI from 2026 onwards will be driven predominantly by fiscal policy (affecting long-term rates), superseding monetary policy.

🎈USD Vulnerability: Anticipate a structural, multi-year depreciation of the USD—not de-dollarisation, but a rotation is necessary. Diversify from the USD; its dominance is shifting to a functional role.

🎈EM Governance: The single biggest risk in Emerging Markets is Governance, requiring highly selective investing (EM is not one country).

🎈Fed Independence: The erosion of the U.S. Fed's independence is a material risk, particularly with the re-composition of the FOMC members next year.

🎈Inflation & Duration: The continuing risk of inflation means investors must avoid taking unnecessary duration risk.

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✨ Opportunities & Alpha

🟢Volatility Creates Value: Uncertainty creates volatility, which in turn generates opportunities—don't be affected by the noise.

🟢Active Alpha: A striking 92% of active managers beat the index in fixed income, suggesting high potential for skilled selection.

🟢EM Mainstream: The old mindset that EM is risky is obsolete. DM may need to adopt an EM playbook due to economic fragmentation.

🟢Regional & Currency Plays: Expected easing of interest rates in APAC presents a regional opportunity. There is a notable bullish view on LATAM currencies.

🟢Bond "Destiny": "Equity are expectations; bond is contract. Bond yield is destiny. Lock in the yield, get paid for holding."

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🎯 Investment Strategy

💡Global Diversification is Key: Mandate comprehensive global diversification across countries, currencies, and crucially, between public and private assets to build resilient portfolios.💡Duration Strategy: Strategically, investors should keep duration short and wait for the yield curve to steepen before extending.

💡Seek Value Beyond Rating: Look beyond traditional safety; countries like Australia offer a higher yield than USD equivalents despite a AAA rating.

💡Explore Alternatives: Consider real asset-backed instruments like the Malaysia Sukuk (RM1 trillion market) for secured diversification, #PrivateCredit as Non Market Correlated Alternative Investment.A massive thank you to all the speakers and organisers for such a thought-provoking day! #FixedIncome #InvestmentStrategy #GlobalEconomy #MarketAnalysis

Kenny Loh is a distinguished MAS Private Wealth Advisor with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.

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