Asset managers push diversification amid uncertainty

The US election, China’s uncertain economic recovery, and a broad geopolitical conflict add risks to the global economy and investment, say pundits, recommending global portfolio diversification to cope with the risk.
Tai Hui, chief market strategist at JP Morgan Asset Management (JPMAM), said clearly there are three hot topics in the investment world, led by the elections in the US.
“Second is China — whether the recovery is genuine and we will see a bit more rebound in 2025? Third is broader geopolitical concerns,” he told an investment seminar co-hosted by JPMAM and Kasikorn Asset Management (K-Asset).
Regarding the US election, markets do not like uncertainties, said Mr Hui.
“Because the race is so close, we expect additional volatility the next few weeks,” he said.
“After the elections, regardless of the outcome, once investors realise who’s the new president and which party controls Congress, the decline should ease considerably.”
In China, the government has introduced several policies.
“This sends a more powerful signal that investors love to hear. However, long-term challenges remain. For example, in the property sector, there are high housing inventories with lots of unsold units,” said Mr Hui.
“As for geopolitics, we are watching whether the tensions in the Middle East lead to disruption in the supply of oil, either in terms of production or transport, as Iran controls a significant amount of the global supply.”
Win Phromphaet, executive chairman of K-Asset, agreed there are several uncertainties in the global economy, including the US presidential election, geopolitics, and a changing monetary policy landscape, coupled with the Thai economic recovery.
“The Federal Reserve’s policy rate cut last month of 50 basis points was quite large, and the market liked it because it supports the US economy having a soft landing,” he told the seminar.
“The rate cut is also good for the equity and bond markets, so investors should continue to invest selectively.”
In terms of the US election, if Donald Trump wins, Vietnam would be a clear beneficiary in terms of attracting new investment, said Mr Win.
K-Asset recommends investors diversify their investments with a “core-satellite portfolio”.
The core portfolio, consisting of long-term investments in multiple assets, should account for 80% of the total portfolio. The remainder is the “satellite portfolio”, comprising short-term investments, according to the brokerage.
“Multi-asset portfolios are more resilient than other asset classes,” said Mr Win.
He said K-Asset targets growth of its assets under management from 1.5 trillion baht to 2 trillion in three years.