Investment experts see a year of growth, highlight emerging opportunities

Investment experts predict that 2024 will be a year of emerging opportunities as most economies are on a trajectory of expansion. The latest World Economic Outlook predicts that global growth will stay at 3.2 percent this year and next, with median headline inflation declining from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025. These indicators continue to point to a soft landing. The International Monetary Fund (IMF) also predicts that the economic damage from the past four years‘ crises will be less severe, although the impact will differ from country to country. Notably, growth in the euro area is seen to improve but will start from low levels due to past shocks and strict monetary policies. But unlike the US, there’s little sign of overheating. The US economy averted recession and remained resilient. This was propelled by consumers confidently dipping into the savings they had from the stimulus packages they received during the COVID pandemic, and simply spending.

Ecaterina Bigos, Chief Investment Officer at AXA IM Core Asia shared, “Robust consumer spending catalyzed by post-pandemic savings buffers and a healthy jobs market have resulted in the US economy remaining resilient despite higher interest rates. The US economy is also benefiting from planned industrial investment via the CHIPS and Inflation Reduction Acts which are supporting employment, productivity, and ultimately economic growth for years to come.

Emerging opportunities as Global Central Banks’ rate cuts approach

The Federal Reserve maintained its target federal funds interest rate. While they acknowledged a “lack of progress” on inflation, they noted that the current policy is still well positioned. With this, investors and economists have adjusted expectations and are forecasting big interest rate cuts as service inflation, driven by strong job growth and steady consumer spending, stays high.

Citing 2024 as the “Year of Multi-Asset” Shaun Jamieson, Product Strategist of BlackRock pointed out that in the last 10 years, investors had to dabble in riskier investments to produce yield, but “80% of global fixed income (including Europe and emerging market bonds) is now delivering more than 4% in yield, which gives us a plethora of opportunities as investors.” The soft-landing scenario will open up opportunities in multi-asset strategies while keeping risk in check.

He added, “Multi-asset strategies have the potential to help investors capture diversified sources of upside and yields with a balanced risk framework. Income looks compelling after the historic move up in yields.”

Furthermore, David Chao, Global Market Strategist at Invesco, recognized opportunities in Artificial Intelligence. He shared, “The era of AI is no longer a distant future; it’s a present reality reshaping the world around us and revolutionizing the way we approach investments and financial opportunities.” Riding the wave of worldwide AI adoption, Chao shared that AI leaders (particularly the Magnificent 7) have dominated US large-cap stock performance. He added that the value of AI is in the way it has embedded itself in people’s daily lives, so much so that we interact with it several times a day, in mundane things such as algorithms that decide Facebook feeds, Netflix recommendations, or even biometrics.

BlackRock Vice-President for Southeast Asia Wealth, Terena Kuo also acknowledged that the best trends at the moment are technology and healthcare, the latter due to the aging populations in developed countries. Among tech investments, however, Dexter Agcaoili, Retail Propositions Director for Single Premium Products and Unit Linked Funds at AXA Philippines advised would-be investors to be wary of tech with limited applications. “The value of an asset would depend on its use,” he cautioned. He later added that in general, any investor should invest in companies that have proven cash flow.

William Leung, Senior Vice President & Head of Asia Pacific Real Estate at Cohen & Steers also predicted new opportunities in REIT investments following the expected halt in rate hikes. He pointed out that REITs were an essential part of any diversified portfolio, citing the potential for high income, supported by strong cash flow through participation in different real estate sectors, and trading at reasonable valuations.

He revealed, “Real estate, which may be often seen as a traditional sector, now includes alternative segments with strong fundamentals. Key growth drivers are next-generation sectors like data centers, cell towers, and senior housing. These alternative sectors have boosted the Real Estate Investment Trusts (REITs) market from $445 billion in 2003 to almost $2 trillion in 2023.”

Actionable Advice

Given the positive outlook backed by emerging opportunities, Agcaoili brought attention to the importance of diversification in managing an investment portfolio and emphasized that it isn’t something investors need to do on their own. He explained how diversification is about balancing stability and opportunity while reducing overall portfolio volatility. This was supported by Chao, advising that a diversified and consistent portfolio over a long period presented the surest way to earn real money from investments. For example, he advised that gold should also be part of any portfolio, noting its stable value that has historically never spiked but has also never plunged.

hese discussions were led and hosted by AXA Philippines through its inaugural investment forum held at the Manila Peninsula and attended exclusively by its highly valued partners and customers. With the theme, “Dominating Fluid Markets, Taking Advantage of Market Volatility,” Abel Vergara, Chief Proposition and Products Officer at AXA Philippines opened the program and delivered his keynote address. He shared, “Achieving financial goals requires a strategic approach that considers risk tolerance, investment horizon, and market conditions. The insights gleaned from seasoned experts are intended to significantly enhance investment strategies, mitigating risk and increasing the potential for positive returns.”

AXA recognizes that putting together and maintaining a viable diversified portfolio can be a daunting and time-consuming endeavor. As a global leader in insurance and investment, AXA offers a simplified  and seamless way of extensively diversifying asset portfolios through Asset Master.

Asset Master is an insurance and investment plan that helps investors spread investment across diverse and professionally managed funds such as the Global REIT (Real Estate Investment Trust) and Property Income Fund which invests in prime real estate, in a broad range of sectors; Global Assets Income Paying Fund (GAIN) which provides dividends and diversified exposure to both global bonds and equities; and Global Advantage Funds which specifically covers the 100 largest and most active non-financial stocks in the US.

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