Investors have been challenged to stay awake to looming policy changes to reposition their portfolios for better returns that meet long-term financial goals.
- •With slowing inflation, Standard Charted Bank through its Global Market Outlook for the second half, 2024 notes that major central banks rate cuts, which started in Q2, are likely to extend into the second half of the year.
- •The central banks of Sweden and Switzerland and the European Central Bank have already cut rates as growth and inflation slow.
- •The bank believes the Fed has room to follow suit, albeit later in H2, as slowing rents and softening labour markets drive inflation lower.
“Given this environment, balanced foundation allocations comprising equities, bonds and alternative assets are likely to outperform allocations that are solely aimed at generating income,” the report notes.
For opportunistic allocations, Standard Chartered Bank’s Wealth Solutions Chief Investment Office (CIO) continues to favour growth sectors in the US focused on the technology and communication service sectors.
In Europe, the barbell-like strategy is consistent with the improvement in the growth outlook; the team is Overweight the technology and healthcare sectors. In China, the team favours select government policy beneficiaries and is Overweight the technology, communication services and consumer discretionary sectors.
“Staying invested for the long term, adapting to trend shifts and keeping a watch for opportunistic ideas to add to a diversified portfolio. This is our fundamental investment approach which also underpins our latest outlook report.
“We hope that by adapting to the shifting winds of policy changes in the coming months, investors can reposition their portfolios to achieve optimal returns that meet their long-term financial goals,” Manpreet Gill, Global Chief Investment Officer said.
“Our clients remain largely optimistic about economic opportunity in the country, however at the same time, they are closely monitoring developments and shifting their focus to understand the impact of current events on their wealth.
“By working alongside them to understand their individual goals and risk tolerance, we are able to create investment strategies that capitalise on the benefits of a well-diversified, long-term foundation portfolio with sufficient protection to address their needs,” Paul Njoki, Head of Wealth and Affluent Banking, Kenya and East Africa, said.
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