Fresh from the blows dealt by the Chinese government’s
measures, news of the Evergrande saga has served to further dent optimism in
the Chinese markets and sparked further fears of contagion in the broader
markets.
In a special presentation by the various iFAST Research Team, the following opportunities were discussed, and here is a summary of their thoughts on the following sectors.
Asia High Yield Bonds – Attractiveness remains largely intact for the segment, however for investors who are concerned about specific company risks, such as in the case of Evergrande would do well to spread out the idiosyncratic risk via an Asia High Yield fund, to take advantage of the diversification benefits it provides as well as the expertise of its fund management team.
Asia Short Duration Investment Grade Bonds – While the yields in this bond segment are lower, their credit profile provides a greater aspect of safety vs High Yield bonds. Investors looking to reduce risk exposure to the High Yield segment can allocate their portfolios toward these lower risk investments.
Chinese Financials – These have come under fire from the possible contagion effects of bad real estate loans weighing on their P&L and while there are material impacts, these fears are likely overblown and the pessimism is largely priced in at current juncture. The near-term weakness is also easily offset by the improving fundamental of China financials & possible easing in monetary conditions.
In addition, with the Price to Book valuations of the Big 4 Banks near their lowest at ~0.42X P/B, downside risks are limited.
China Technology – While the sector is likely to remain under the watchful eyes of Chinese regulators in the near-term, there is still promising long-term growth for Chinese technology. Rising internet penetration, digitalization of consumption and supportive policy growth for homegrown next-gen tech remains robust secular tailwinds for this high growth sector.
The recent dip has made share prices more attractive than before, giving investors the opportunity to gain exposure to the sector’s long-term growth.
China onshore Equity market (A-shares) - At the same time, investors can tap on the domestic A-share market, predominantly consisting of companies in the financials, consumer and non-internet IT sectors which we believe is well-positioned for the Common Prosperity theme, particularly in the short term, and has some strong catalysts in the long-term as well via the inclusion of Tech Manufacturing (Semiconductors, 5G infrastructure), and Green Initiatives (Solar Panels, Electric vehicles) which are critical, cutting-edge technologies that China wishes to lead the world in the coming decade and will likely see very supportive policies in favouring them.
To help you get a leg up on investing profitably at FSMOne.com, we have launched a promotion on the Unit Trusts and ETFs which can help you gain exposure to these sectors mentioned. From 30 September 2021 to 22 October 2021, invest in these Unit Trusts or ETFs and enjoy the following:
i) Unit Trusts: Receive $10 worth of Bonus Units for every $10,000 invested in each Fund.
ii) ETFs: Free Processing Fees on the first 2 trades for each ETF
3 Fixed Income Opportunities
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Sector |
Fund |
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Asian High Yield |
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Asian Investment Grade Bond |
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3 Equity Fund Opportunities
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Sector |
Fund |
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China Equity |
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China onshore A-shares |
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Greater China |
4 ETFs to access these attractive sectors
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Sector |
Fund |
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China Semiconductor |
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China Financials |
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China Banks |
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China Technology |
Terms and Conditions (3 Fixed Income Opportunities & 3 Equity Fund Opportunities)
1. This promotion is valid from 30 September 2021 to 22 October 2021 ("Promotional Period"). To be eligible, unit trusts orders must be placed before 3pm on 22 October 2021.
2. For unit trusts, cash payments (cheque and internet payments) must reach us by 29 October 2021. Pending cheque trades whereby the payment has not reached us by 29 October 2021 will automatically be voided after this date.
3. To qualify for this promotion, minimum investment amount for any of the promotional funds is required and are subjected to minimum investment amounts imposed in the Prospectus of the respective Funds.
4. CPFIS-OA, CPFIS-SA and SRS transactions are not eligible for this promotion.
5. Payments made by cash and/or switch buy from parking facility funds are eligible for this promotion.
6. Switching from other funds and transfer-ins will not be eligible. Transfer-ins that are not eligible include those from the companies using the iFAST platform (including iFAST Global Markets) to FSMOne.com. Please refer to the list of companies here.
7. This promotion is valid on a single account basis only; two or more FSMOne accounts cannot be combined to be eligible for this promotion.
8. Promotional Rewards points will be awarded on a net cash transaction basis (total cash subscription less total cash redemption) at the end of the promotion and credited within 6 weeks after the close of the promotion.
9. Eligible investors will receive their bonus units within 6 weeks after the Promotional Period. Investors will be notified via email upon crediting of the promotional Rewards Points.
10. FSMOne.com reserves the right to amend the Terms and Conditions without prior notification.
11. This advertisement has not been reviewed by the Monetary Authority of Singapore (MAS).
Terms and Conditions (4 ETFs to access these attractive sectors)
1. This promotion is valid from 30 September 2021 to 22 October 2021 (the "Promotional Period"). To be eligible, orders must be placed before respective exchanges' closing timings on 22 October 2021.
2. The Promotion excludes exchange related fees and prevailing GST charges apply.
3. The Free Processing Fees are only applicable for the first 2 trades in the selected ETFs listed in the promotional article. Trades can be either buy or sell of the ETFs eligible for promotion.
4. Processing Fees will be credited to the client’s FSMOne Multi-currency Cash Account within 6 weeks after the end of the Promotional Period.
5. Minimum investment amount is required and dependent on the transacted price and quantity of the Stock/ETF the client is purchasing.
6. Only trades in Cash are eligible for this promotion. CPFIS-OA, CPFIS-SA, SRS, and RSP transactions are not eligible for this promotion.
7. W-8BEN form submission is compulsory for investment in US securities.
8. Only non-US persons are eligible to trade in US markets.
9. This promotion is valid on a single account basis only; two or more FSMOne accounts cannot be combined to be eligible for this promotion.
10. FSMOne.com reserves the right to amend the Terms and Conditions without prior notification.
11. This advertisement has not been reviewed by the Monetary Authority of Singapore (MAS).
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