Tiger Roaring Opportunities

Is it the right time to invest now?

Whether you are in your 20s, 30s or even 40s, it is never too late to start investing. However, in the prevailing market conditions – one where is expected to be volatile, it has come to our attention that many investors have a pertinent question in mind: ‘ is now the “right time” to invest?’ Our simple answer to this question would be that there is never the “right time” to invest.

To provide a better understanding to our answer, let’s take a trip down memory lane. In March 2020 when markets sold off at an unprecedented pace, the tech sector emerged the winner as the health crisis gave the impetus to shift our daily activities online. Amidst this situation, you would have made a substantial amount should you have allocated your monies to the sector. However, if you not done so and now that valuations have become rich – sector is susceptible to correction, does that mean you will not invest your monies until the next crisis or perhaps the next bottom?

In the scenario whereby you choose to wait for the next ‘big’ opportunity, you would have committed the mistake of timing the market – the act of entering and exiting an investment at specific moments and hoping that these actions generate good returns, which is akin to predicting the weather. By timing the market, you will essentially forgo the ability to enjoy the effects of compounding.

Unit Trust might be the answer to your woes

We continue to recognise that markets have been turbulent lately and will be the same heading into 2022 –valuation rich sectors such as tech may suffer and yields will remain range bound with the curve steepening over the next few months before flattening as the market keeps a look out on the movement of rates in our view. Navigating such a backdrop will no doubt be difficult but we think that investing via a Unit Trust, commonly known as a mutual fund will bring about benefits to your portfolio.

With market participants expected to be jittery as they react to a slew of positive and negative news, a pullback in markets is inevitable. As such, staying diversified will limit the potential downside of your portfolio. By investing in a Unit trust, you are immediately diversified into a variety of investment within its portfolio – the underperformance of a particular company would be balanced out by the returns from other companies in the portfolio.

Secondly, when you purchase a unit trust, you will stand to gain from expert management since managers deploy an active strategy which focuses on securities to buy and sell at any given time based on factors such as earning growth of a company or even the macro environment, in essence generating additional alpha.

Finally, Unit trust also provides investors the flexibility to invest in smaller amounts. In an environment where uncertainty is overarching, embarking on a Dollar Cost Averaging (DCA) strategy commonly known as Regular Savings Plan (RSP) will allow investors to buy the dips and reap the fruits in the long run.

*Investors will enjoy 0% commission and platform fees when you transact Unit Trust with Tiger Broker’s Fund Mall!

There are still opportunities to grow your wealth

Europe and Asia, more specifically China are where investors can look to in 2022 geographically. At a sectorial level, financials, energy and materials appears well positioned in the prevailing macro conditions – these sectors tend to benefit from strong cyclical momentum and have been positively correlated with yields and inflation, while healthcare and tech continue to exhibit very enthralling long term growth story. 

Turning to fixed income, Asian High Yield is our pick for the riskier segment due to its i) cheap valuations, ii) higher yields and iii) low duration. For risk averse investors, Chinese government bonds will be a good choice as it i) provides higher real yields, ii) has a lower correlation to global bond markets and offer iii) better risk reward.

 The funds that investors can consider in 2022 are as follow:

Geographical Allocation

 $Allianz China Equity Cl AT Acc SGD(LU0417516902.SGD)$

$JPMorgan Funds - China A (dist) USD(LU0051755006.USD)$

$Natixis DNCA Emerging Europe Equity RA USD(LU0084288595.USD)$

$Allianz Europe Equity Growth Select Cl AT Acc H2-SGD(LU0920783379.SGD)$

Thematic Allocation

$Fidelity Global Financial Services A-USD(LU0971096721.USD)$

$Blackrock World Financials A2 USD(LU0106831901.USD)$

$FTIF - Franklin Technology A (acc) USD(LU0109392836.USD)$

Fixed Income

$Eastspring Investments - Asian High Yield Bond ASDM SGD-H(LU0756522594.SGD)$

$Fidelity China RMB Bond A-ACC-USD(LU0740036214.USD)$

​Check out our other posts for more indepth analysis. Not sure where to begin? Subscribe to our UT Starter Pack  and get $50 Cash Back.