moomoo SG: 5 investing tips to hedge against inflation from experts
- Written by The Southern Cross
These macroeconomic headwinds signaled efforts to keep the Singapore dollar strong even as the central bank raised full-year projections for inflation. It has become prudent for Singaporean investors to be well-versed with financial knowledge to grow their wealth despite frosty market conditions.
moomoo SG convened with industry leaders to share valuable insights on how investors can grow their wealth in a volatile market. The session was designed to provide a well-rounded market outlook for the second half of 2022. There were some of the views of the WAYS TO HITS BACK INFLATION shared by the five investment experts during the conference.
Continue Investing, Diversify your portfolio
Evonne Tan, Head of Private Banking at Barclays Singapore, raised market concerns about slowing global growth and elevated inflation driving volatility in global markets. This often leads investors to deviate from their long-term goals and plans, but pre-empting market volatility through a core-satellite approach, embodied by low costs and diversification, opportunities abound for investors to outperform the market.
"Preparation for difficult periods through good diversification can support calmer decision-making and make it easier to stay the course. So, while others head for quick exits, an investor can capitalize on opportunities," she said, noting that diversification can make it easier to stay invested and capitalize on new opportunities. Inflow to the five SGX-listed REITs and ETFs has also hit a record last month with over 60 million of inflows
Invest in REITs
Kang Wei Chin, AVP, ETF Product Management, SGX Group, suggested that despite increasing rates, S-REIT with the sector average dividend yield of 6.4% are still offering a higher yield spread of more than 300 basis points to Singapore's 10-year bond yield. In addition, the sector in average has secured 75% of its borrowings on fixed rates. "Investors who are looking for more passive approach for either technical or strategic asset allocation, there are two S-REIT ETFs, namely CSOP iEdge S-REIT Leaders ETF and Lion-Phillip S-REIT ETF that invest solely into Singapore REIT market. And, for those who are searching for greater diversification or are who are already invested in Singapore REIT market can look at the other three ETFs, NikkoAM-StraitsTrading Asia Ex Japan REIT ETF, Phillip SGX APAC Dividend Leaders REIT ETF, and UOB Asia Pacific (APAC) Green REIT ETF."
Beat the bear with the USD Money Market Fund
Bruce Zhang, Portfolio Manager, CSOP Asset Management, pointed that both the US stocks and US bonds fell on the back of the Fed tightening, and even commodity pricing started to fail in the fears of another recession. However, the USD Money Market Fund benefits from its relatively stable yield and the dollar strength due to the low sensitivity to Fed's hikes, less FX risk on USD performance, and high-quality underlying exposures, said Bruce Zhang. He added that USD money market funds could provide a relatively competitive return versus the demand deposit but still have the demand deposit features, for example, the T0 creation and redemption. However, when the market is volatile, it can also provide safety and some necessary liquidity for investors.
Gold can against the headwind of rising yields
Jermyn Wong, Head of SPDR, added his insights on gold price performance since the start of the pandemic through the first half of 2022 and how it has historically performed robustly against market downturns. He shared that because gold remained resilient against the headwinds of rising yields, more investors are choosing to increase their Gold-ETF exposure as a hedge against market volatility.
Generate Cashflow
While hedging strategies are safety nets for investors' portfolios, Borwen Neo from The Next Level, discussed how investors could also generate cashflow in a bearish market. Rather than counting on dividend yields or deleveraging portfolios, he urges investors to consider other investment tools as means to boost cashflow.
Keen on exploring more investment chances against inflation, visit: https://j.sg.moomoo.com/00kT3L
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