UOBAM pushes low-risk assets

With the Sino-US trade dispute aggravating the global economic slowdown, investment in lowrisk assets is the recommended strategy to shield against recurring financial volatility, says UOB Asset Management (UOBAM).

Further retaliatory measures by China against the US’s punitive import tariffs are expected to exacerbate tensions and cause stock market sentiment to remain volatile, said UOBAM chief executive Vana Bulbon.

As a strategy to fend off heightening risks, investment in fixed-income and property funds is recommended because this asset class has a low investment risk, Mr Vana said.

Investment diversification into high-quality stocks is also suggested as a means to absorb a risky investment outlook, he said.

On a macroeconomic note, US economic growth in the first quarter beat market expectations as GDP expanded by 3.2%. But such optimism will fade if the upcoming bilateral negotiations between the US and Chinese presidents are unsuccessful, Mr Vana said.

For China, economic growth is expected to expand in a range of 5-6.5% this year, with weaker export growth anticipated, he said. The Chinese government is expected to continue spurring domestic growth momentum by a loose monetary policy.

The US kicked off a tariff battle with China in 2018, seeking sweeping structural changes from Beijing and alleging that the Chinese have engaged in intellectual property theft over many years, which China denies.

But tensions rose sharply in May after the Trump administration accused China of reneging on promises it had made during months of talks.

The US also upped the ante by essentially banning Huawei from the country and adding the Chinese tech behemoth to an “entity list” of companies barred from receiving USmade components without permission from Washington, though the company has been granted a 90-day reprieve for now.

For the first four months, UOBAM registered total assets under management at 224 billion baht, up 7% year-on-year.