Investors should set their sights on long-term structural trends that are impacting the global economic system and pay attention to short-term risks when making investments for the second half of the year, international asset management firm Schroders said.
Trends taking place globally include innovative transformation, sustainable development, change of lifestyle, and 5G development. Investors should pay attention to those themes because they are the ones making an impact on the global economic system and people’s lives, Keiko Kondo, the firm’s deputy head of multi-asset investment in Asia, said on Thursday in a media briefing.
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Taking 5G technology for example, Kondo said, “it enables companies to develop or adopt new applications such as an environment monitoring system that could help prevent or enable earlier preparedness for natural disasters, which also provides opportunities for investors”.
Kondo said the current spike in inflation could go down later this year, but she expects the rate to pick up again next year. While the US Federal Reserve may tighten monetary policy under that circumstance, the European Central Bank may keep its “dovish” position given its greater tolerance for inflation, she predicted.
The investment manager believes the US dollar and bonds will play important roles in helping investors hedge against risks.
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Fluctuation of the Chinese yuan is expected to be moderate due to the Chinese government’s control measures, Kondo added.
Schroders is bullish over equities while keeping its bond inventory at a relatively low level, she said, adding that it has maintained a diversified investment portfolio, which will allow it to benefit from continued economic growth in the future.
Meanwhile, as uncertainty over the pandemic development makes the economic outlook more complicated, investors should pay attention to related risks, she said.