SINGAPORE (July 8): Most markets around the world are likely to ease on the back of the uncertainty due to the ongoing US-China trade war,which is likely to extend beyond the trade sector.
But while this results in a climate of uncertainty, UBS Wealth Management advises clients to remain invested, but also think about how best to protect and expand their portfolios.
For a start, UBS likes industries designed for the future. This includes Artificial Intelligence (AI) and 5G cellular network technology which will enable users to download a 1GB movie in 3 secs.
This is especially important in Asian markets, where business innovations are based on the quick and widespread adoption of technology by companies.
UBS also insists Singapore banks give “better bang for the buck”, compared to REITS.
“In Singapore, banks form a core part of our portfolios and they offer a sustainable dividend yield while generating good equity returns – making them a solid investment,” says Tan Min Lan, head of the Asia-Pacific Investment Office at UBS Wealth Management Chief Investment Office.
UBS chief investment officer Mike Ryan cautions investors against attempting to time market tops and bottoms, due to the climate of volatility.
“We advise our clients not to try and reach for high yet unsustainable dividend yields. For instance, dividend growth stocks are a prudent strategy which investors can utilise,” he shares.
“While there is no apparent sense of complacency or acute anxiety amongst investors, there is a general climate of cautious engagement, with people looking to replace lost income,” he adds.
Moving forward, UBS estimates earnings growth for 2018 and 2019 to be at about 6.5%, while local interest rates are predicted to be lowered to 1.6% from about 2% over the next 6-12 months.
