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April 2025
Despite heightened volatility opportunities can still be found
Despite greater volatility and short-term downside risk for equities, we remain Overweight in US and Asia-ex Japan where the risk reward remains sufficiently constructive over a 12-month horizon. We have also upgraded US Treasuries and Developed Markets (DM) Investment Grade (IG) bonds from Underweight to Neutral for those seeking higher quality bonds given current uncertainties.
Structured Investments
Theme: China’s Financial sector leveraging on stimulus policies
China’s plans to refine its financial strategies will create opportunities for Hong Kong’s Exchanges and regional financial entities through increased listings and supportive initiatives. The People's Bank of China (PBOC) has introduced innovative policies to enhance wealth management and improve cross-border bond investments. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) is urging the central government to promote more Chinese company listings on the Hong Kong stock exchange. This positive trend is expected to benefit sectors like wealth management, sustainable finance, family offices, fintech, and insurance.
- Hong Kong Exchanges and Clearing Limited (HKEX) is one of Asia's largest stock exchanges and the 9th largest globally by market capitalization. It connects international investors to mainland Chinese companies and facilitates capital raising, operating under Hong Kong's regulatory framework that offers greater access for foreign investors. Management outlined key initiatives for the year, which includes implementing phased minimum spread reductions, starting around mid-2025; exploring a shorter settlement cycle to align with US standards, with consultations anticipated by mid-2025, and reviewing IPO rules to attract more listings.
- Industrial and Commercial Bank of China (ICBC) is China's largest commercial bank by assets, loans, and deposits, with CNY 35 trillion in assets, CNY 21 trillion in loans, and CNY 26 trillion in deposits as of 2021. It excels in both consumer and corporate banking services. China's financial regulators implemented measures to stabilize the stock market by encouraging long-term funds, such as annuities, insurers, mutual funds, and pension funds to increase investments in domestic equities. This could result in over CNY 1 trillion in additional inflows for the onshore A-share market. H-share Chinese banks provide a dividend yield about 1.4 percentage points higher than A-share banks.
Bonds
BP is a global energy company with a wide reach across the world’s energy system. BP has been actively paying dividends and buying back its shares.
BP Capital Markets Plc (GBP)
This bond pays a coupon of 5.773% p.a. with maturity on 25 May 2038.
BP has operations in Europe, North and South America, Australasia, Asia and Africa. The company is divided into 3 main lines of business:
- Gas & Low Carbon Energy segment, which comprises of BP's gas and low carbon businesses. BP's gas business includes regions with upstream activities that predominantly produce natural gas, integrated gas and power, and gas and power trading. BP's low carbon business includes solar, offshore, and onshore wind, hydrogen and carbon capture and storage (CCS) and BP's share in BP Bunge Bioenergia.
- Oil Production & Operations segment, which comprises regions with upstream activities that predominantly produce crude oil, including BPX energy.
- Customers & Products segment, which comprises BP’s customer focused businesses - spanning convenience and mobility, which includes convenience and retail fuels electric vehicle (EV) charging, as well as Castrol, aviation, and B2B and midstream businesses. It also includes BP's oil products businesses, refining and trading.
BP has been actively paying dividends and buying back its shares. BP plans at least US$14b of share buybacks through 2025 and remains committed to using 80% of surplus cash flow for shareholder distributions. The cash position of the company is more than enough to meet short term debt.
Funds
Multi-asset Funds
Lion-Bank of Singapore CIO Supertrends Multi Asset Fund
The Lion-BOS CIO Supertrends Multi-Asset Fund is a multi-asset strategy that aims to provide income and long-term capital growth by investing in a diversified portfolio of asset classes including global equities, ETFs, global bonds, the writing of equity covered call options and other collective investment schemes. Guided by research from Bank of Singapore’s award-winning Chief Investment Office, the fund takes a rigorous research-based approach to identify quality companies within equities and fixed income with resilient business models and robust fundamentals. The fund also has distribution share classes for investors looking for dividend income.
PIMCO Balanced Income & Growth Fund
The PIMCO Balanced Income & Growth Fund is a global multi-sector strategy that seeks to combine PIMCO’s total return investment process and philosophy with income maximization. The Portfolio construction is founded on the principle of diversification across a broad range of equity and global fixed income securities. The fund has a historical annualised dividend yield of 7.24% p.a.
Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 31 March 2025.
Bond Funds
PIMCO GIS Income Fund
The PIMCO GIS Income Fund is designed for investors who seek steady income with a secondary goal of capital appreciation. It takes a broad-based approach to investing in income-generating bonds. The fund aims to achieve this by employing PIMCO’s best income-generating ideas across global fixed income sectors. The fund has a historical annualised dividend yield of 6.51% p.a.
Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 31 March 2025.
M&G (Lux) Optimal Income
The M&G (Lux) Optimal Income Fund is a global bond fund that aims to provide a combination of capital growth and income to deliver a return based on exposure to optimal income streams in investment markets, while applying environmental, social and governance (ESG) criteria. The fund has a historical annualised dividend yield of 5.93% p.a.
Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 31 30 March 2025.
Equity Funds
AB Low Volatility Equity Portfolio Fund
The AB Low Volatility Equity Portfolio fund is a global equity fund seeking capital growth through securities of companies that the fund manager believes have lower volatility. Its investment approach focuses on quality, stability and price, where the fund seeks high quality stocks of companies with stable performance and predictable earnings, trading at attractive prices. The fund also has distribution share classes for investors looking for dividend income.
Neuberger Berman Global Equity Megatrends Fund
The Neuberger Berman Global Equity Megatrends fund seeks to achieve long-term capital appreciation through investment in a high conviction, global all-cap equity portfolio of an expected 20-30 companies that are directly supported by multiple long-term, global secular shifts. The investment team follows a risk-managed approach to develop conviction, with particular focus on valuation discipline.
LionGlobal Asia Pacific Fund
The LionGlobal Asia Pacific Fund invests primarily in the equities markets of the Asia Pacific (ex-Japan) region across both emerging and developed markets, with no target industry or sector. The fund aims to achieve capital appreciation by adopting a disciplined investment process and a high conviction approach, focusing on identifying growth opportunities at reasonable prices.
Currencies
The US Dollar (USD) index (DXY) extended its decline in March as the unwinding of US exceptionalism trades accelerated. Markets are increasingly focused on how Trump’s tariffs are hurting US economy. US data has also been weaker than expected. Ultimately for currency markets, relative growth matters. If growth in the US slumps because of its own doing (i.e. protectionist measures) while growth for the rest of the world holds up (on a relative basis), then the USD may end up weaker over time. From a currency point of view, markets appear to shift from trading tariff fears to trading US recession concerns, and to some extent even trading the de-dollarisation narrative. To put things in perspective, US protectionist measures, fading US exceptionalism and ballooning US debt are some catalysts that may call into question the USD’s status as a reserve currency. More broadly, we continue to expect a divergent USD play, with USD weaker against major currencies, including the Euro (EUR), Swiss Franc (CHF) and Japanese Yen (JPY) while USD may still maintain a firmer tone versus Asia ex-Japan currencies, taking into consideration the potential implication of Trump tariffs on global growth, global trade and sentiments. That said, the currency bias may change depending on how trade negotiations and the de-dollarisation theme pans out.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
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Global Equities Disclaimer
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Foreign Currency
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Dual Currency Returns
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Collective Investment Schemes
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