How to diversify asset allocation amidst uncertainty?
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The monetary policy is a barometer that investors follow closely. On 20th September, the Federal Reserve announced that it would maintain the current interest rates, without any indication of an impending cut. What's your outlook on interest rates? Do you think there will be a rate cut this year?
The uncertainty of future monetary policy suggests that market volatility will increase significantly in the short term. In this situation, the market generally believes that a diversified asset allocation strategy can help balance market uncertainties and capture potential opportunities.
What do you think can help diversify your asset allocation and earn relatively stable returns in such an uncertain environment? We have some possible options for you!
Money Market Funds
Money market fund is a popular option for investors to manage idle cash with high flexibility. According to ICI, as of 21st September, US money market funds maintained an upward trend, reaching a historical high of $5.64 trillion. Money market funds have attracted many investors for relatively stable cash management by maintaining high liquidity and reliability while also outperforming bank interest rates.
Many mooers have shown their preference for Cash Plus for its stable and considerable returns with high flexibility. Here are our popular funds for Cash Plus!
Dividend Funds
According to BQ Prime, experts believe that multi-asset allocation funds are suitable for investors who are cautious about market fluctuations. By spreading investment across different asset classes, industries, or maturities, diversification enables investors to feel less vulnerable to market shocks that impact all of their investments in the same way.
Dividend funds that have diversified asset allocation offer investors stable and reliable returns. With Moomoo fund hub, we offer multiple options of multi-asset dividend funds which have relatively impressive performances in yields. Have you discovered these 2 funds?
*The above fund selection is based on the data disclosed in the fact sheets of fund companies.
*The selected currency for the funds in this event is USD. Only one dividend type will be displayed for the same fund.
US Treasury Bonds
Resilient economic data released following the Fed's meeting reinforced market expectations of tightening policy with the 2-year US Treasury bond yield reaching its highest level since 2006 at 5.148%, while the 10-year US Treasury bond yield rising to 4.479%, its highest level since 2007.
According to UBS, high-quality debt plays a vital role in portfolios as both a source of returns and a long-term diversifier. While short-term Treasury bonds offer the most attractive yields, usually over 5%, medium to long-term US Treasury bonds are becoming increasingly appealing to investors with a longer investment horizon, as the rate hike cycle comes closer to an end.
There are other ways to gain exposure to the US Treasury bond market besides investing directly in these bonds. Funds investing in US Treasury bonds provide investors with more opportunities to earn returns in the bond market while offering higher liquidity and shorter maturity. Here are the top 5 popular-selling bond funds with a relatively high percentage of positions in US Treasury bonds on Moomoo Fund Hub. Let's take a look at them!
*The above fund selection is based on the data disclosed in the fact sheets of fund companies.
*The selected currency for the funds in this event is USD. Only one currency/dividend type will be displayed for the same fund.
Share your insights with us and win rewards!
1. What's your outlook on interest rates? Do you think the Federal Reserve will cut the interest rate this year? Will you adjust your asset allocation strategies?
2. Are you considering investing in or modifying your investment plans regarding the funds mentioned above? Which specific fund aligns with your investment preference? And why?
27 Sep - 13 Oct
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This presentation is strictly for informational and educational purposes and is not a recommendation or endorsement of any particular investment or investment strategy. See this link for more information.
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mr_cashcow : Personally for me it is more about trust and familiarity with the respective investment funds. Currently I'm increasing my positions in $Fullerton SGD Cash Fund (SG9999005961.MF)$ because of its consistent performance, positive returns & liquidity. But of course I am also looking to diversify into other funds as well and one of it is $LionGlobal SGD Enhanced Liquidity Fund (SG9999019293.MF)$ as the fund have been performing very well for the past few months with returns close behind Fullerton SGD Cash Fund
With liquidity comes flexibility and the ability to make adjustments according to the interest rates
More personal research is needed for dividend funds so it is ATM KIV
Having read up about US Treasury bonds it seems to be relatively safe because it is backed by the US government's ability to tax its citizens however it also have inherent risks
With so many arrays of financial securities it can be overwhelming but I'm glad to be on this journey with moomoo
As usual all the above are my personal opinion & are NOT financial advises so plz DYOR/DD
Gong Xi Fuck Cai ❤ : Outlook on interest rates will fall unless Powell step on soap and fall inside toilet. The higher the interest rate the more i put funds in T-bills and bonds. When interest rate get low, then will put more funds in higher yield stock or other hole like cash plus.
Dadacai : The Feds have said it may increase the interest rate later this year and not cut interest rates throughout 2024. Hence, my view is that 2023-2024 will see same or higher interest rates. Currently, there is an inverted yield curve where the yield for shorter term bonds is higher than that for longer term bonds. This has historically been a sign of possible recession. I will therefore be keeping more cash in money market funds like $Fullerton SGD Cash Fund (SG9999005961.MF)$ while looking for opportunities to pick up value stocks at good price points. Disclaimer: This is my personal opinion and not financial advice. Please do your due diligence before making any investment. @AhHuatKopi@aoimizu@93339888@小虎发大财@road to 1 mill@103130372@103126293@102964172@102787643
aoimizu Dadacai: Jitters ahead. Save for rainy days.
Demascus : There's no chance the Fed will cut interest rates this year. The recently announced oil production cuts have sent crude back to $90s and it could go even higher. The stubborn inflation coupled with a tight labour market means that the Fed will take a neutral or even hawkish stance for the remainder of this year.
In view of this, I will be adjusting my asset allocation as I shift towards lower-risk asset classes. I will continuously add to money market funds as I await the end of the Fed's rate hiking cycle.
Once the interest rates peak, I will seek to gain exposure to US treasury bonds through ETFs such as $iShares 20+ Year Treasury Bond ETF (TLT.US)$ or funds like $PIMCO GIS Low Duration Income Fund (IE00BDT57T44.MF)$ which boast a comparatively better credit quality with 70%+ of its holdings rated AAA. These should perform well when the Fed begins its rate cutting cycle.
sg-guru : Inflation is likely to stay high for an extended period of time. It is unlikely that the US Fed will lower interest rate anything soon.
It's highly probable that we may be heading towards a period of stagflation, with high energy prices, high inflation and stagnant growth.
For the short term, it may be wise to put your money in the money market funds, waiting for adjustments in stock prices before taking the plunge.
During period of uncertainties, money (liquid assets) is king.
Rexon Capital : When the interest rates peak, it means we are near the bottom imo. Many analysts have been calling recession since last year. If they keep it up, they might be right 5 years down the road and be called people who foresaw the recession.
Now is a good time to pick up some shares and be ready for the boom in market when the Fed cuts its interest rates.
Of course, if our fellow Putin decides to play abit of Russian roulette. We will have to sit tight and take the market roller coaster
104158779 : From Spore perspective below are few options for more conservative investors.
1. Fullerton Cash Fund
2. MAS TBill
3. Singapore Savings Bond
4. Bank Fixed Deposit
5. Short tenure period endowment insurance
101758077 : Outlook on Interest Rates:
I believe interest rates will likely remain stable for the near term. A rate cut this year seems less probable given the recent Fed announcement.
Diversifying Asset Allocation:
In uncertain times, I'm leaning towards Money Market Funds for stable cash management. Fullerton SGD Cash Fund caught my eye for its stability and flexibility.
Multi-Asset Allocation Funds:
Diversified dividend funds like Janus Henderson Balanced Fund MDis seem appealing. They offer stable returns while spreading risk across different asset classes.
US Treasury Bonds:
I'm keeping an eye on medium to long-term US Treasury bonds. They might become more attractive with the rate hike cycle nearing its end. Considering funds like BNY Mellon Global Credit Fund for exposure.
圓寶 : Outlook on interest rate: Stay higher for longer
Money market funds: Safe and reliable with daily returns
Dividend funds: For long term stability
US Treasury bond: Low risk assets with safe but low returns. A good option to seek refuge from volatile equity markets
$CSOP USD Money Market Fund (SGXZ96797238.MF)$
$Allianz Income and Growth (LU0689472784.MF)$
$Fidelity Funds-US High Yield Fund MDis (LU0532245122.MF)$
Diversify investments into all 3 to reap all the benefits
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