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Fundsupermart Magazine Jan-Mar 2006 January 13, 2006
Find out the answers to 'what and where to invest in 2006' in the new issue of the FSM magazine!


Untitled DocumentFUNDSUPERMART
MAGAZINE

JAN/MAR 2006

The annual Fundsupermart poll on “What & Where To Invest In 2006?” has attracted a record number of respondents. A total of 25 (15 fund houses, 5 financial advisory (FA) firms, and 5 Fundsupermart online forumers) took part, and we have compiled the results in the following pages. They share their insights on where they think we should be invested in for 2006 and the risks we should keep a lookout for. They were asked the following questions:

- Preferred Asset Class: Equities Or Bonds
- Favourite & Least Liked Region
- Biggest Risks To Favourite Region
- Favourite Emerging Market Equities
- Favourite & Least Liked Asian Market
- Outlook For Technology Sector Outlook For Bond Market

We have added some new sections to the poll, including ‘oil prices: concern or opportunity?’, the ‘favourite emerging market equities’ and ‘outlook for bond market’. It is not too difficult to understand why. Oil prices have been hogging the limelight for a large part of 2005. Investor interest in the emerging market region, which includes Asia ex-Japan, Latin America and Eastern Europe, has been piqued by the strong performance these regions have delivered. As for the bond market, it is interesting to take note of the outlook for the different types of bond.

The results of the poll can be summarized as follows:

  • Equities Are The Preferred Asset Class In 2006
  • Asia ex-Japan Region The Favourite Region
  • US The Least Liked Region
  • High Oil Prices And Inflation Among Biggest Risks To Favourite Region
  • Emerging Markets: Most Positive On Asia & Latin America
  • Korea The Favourite Asian Market
  • Indonesia The Least Liked Asian Market
  • Technology Should Generate Positive Returns In 2006
  • Positive On Emerging Market Bonds Within A Bond Portfolio

In previous years, the Asia ex-Japan region easily garnered the most number of votes in the ‘favourite region’ category. In this poll, we find that although Asia ex-Japan remains the favourite region going into 2006, Japan comes in a very close second. In fact, if we only include the votes of fund houses, Japan is the favourite region for 2006. For the title of ‘favourite Asian market’, the majority of respondents have chosen Korea, even though the stock market performed very well in 2005. These are just some of the results we gleaned from this year’s “What & Where To Invest 2006” poll.

RESPONDENTS - Who Took Part In Our Poll?

We have a record number of respondents in this year’s “What & Where To Invest” poll. A total of 25 have responded when we made the rounds in November 2005: 15 fund houses, 5 financial advisory (FA) firms, and 5 Fundsupermart online forumers. Here’s the list of respondents:

Fund Houses

  • ABN AMRO Asset Management ( Singapore)
  • Allianz Global Investors Singapore Ltd
  • Commerzbank Asset Management
  • DBS Asset Management (DBSAM)
  • First State Investments ( Singapore)
  • HSBC Investments ( Singapore) Ltd
  • Henderson Global Investors ( Singapore) Ltd
  • ING Investment Management
  • Lion Capital Management Ltd
  • Phillip Capital Management
  • Prudential Asset Management (S) Ltd
  • SG Asset Management ( Singapore) Ltd (SGAM)
  • Schroder Investment Management ( Singapore) Ltd
  • Templeton Asset Management
  • UOB Asset Management (UOBAM)

Financial Advisory (FA) Firms  

  • Alpha Financial Advisers Pte Ltd
  • FPA Financial
  • Financial Alliance Pte Ltd
  • IPP Financial Advisers Pte Ltd
  • Providend Pte Ltd

Fundsupermart Forumers

  • Bikeman
  • Hulumas
  • Isaac
  • Makoshark
  • Zhuge_liang

WHAT & WHERE TO INVEST IN 2006 - RESULTS

1) EQUITIES ARE THE PREFERRED ASSET CLASS

Despite the run-up in equity markets in 2005, respondents are still bullish, with 87% of them expecting equities to outperform bonds in 2006. In 2005, global equity markets, represented by the MSCI World Index, have risen 11.8% in SGD terms year-to-date (as at 16 December 2005). The following are the most frequently cited reasons on why they think equities look more attractive than bonds in 2006:

- Valuation for equities looks relatively attractive in comparison to general bond instruments
- Earnings yield from global equity markets looks more attractive than government bond yields
- Strong merger & acquisition possibilities likely to have positive impact on equity markets
- Continued hike in interest rates in 2006 generally does not bode well for bond instruments

In 2005, global equity markets enjoyed a strong rally, particularly for the Asia excluding Japan and Japan equity markets. The Japan market, represented by the Nikkei 225 index, was up 19.6% on a year-to-date basis, and the Asia ex-Japan market represented by the MSCI Asia ex-Japan index was up 18.4% (both returns are for the year 2005, as at 16 Dec 2005). The second half of 2005 was especially strong for both equity markets. Despite the hike in oil prices, the possibility of a bird flu pandemic in Asia, and interest rate hikes in the US, most of the equity markets rallied....

Want to read more about the findings of our exclusive poll?

Read the full article as well as our fundsupermart houseview in the latest Fundsupermart magazine. Get your copy now!

OTHER HIGHLIGHTS:

  • Our Fundsupermart Star Ratings
  • BRIC Is No Gimmick!
  • What's In Store For Global Equities
  • Still Bullish On Korea In 2006
  • The Rally In Japanese Equities Is Far From Over
  • We Are Wealthier Than We Know
  • United Global Healthcare Fund Returns!

Fundsupermart magazine is available at all major bookstores (Kinokuniya, Times, Borders, MPH and Popular), Cold Storage, NTUC Fairprice, and bus kiosks. If you're interested in subscribing, click here. Fundsupermart clients with minimum 10,000 SGD in holdings, will receive their complimentary copy by post. Find out more about this by clicking here.