HSBC Global Private Banking is advising high-net-worth clients to consider taking on more risk in their portfolios.
The bank believes investors would be well served by putting more cash to work now as the investment environment has become more attractive.
In its second quarter of 2024 investment outlook, the bank said it sees “fertile ground” for investment returns.
The US is shifting away from recession risks towards a soft landing, and potentially ‘no landing,’ according to HSBC.
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This has prompted the bank to shift to zero cash in its tactical asset allocation and an overweight position in both global equities and bonds.
The private bank said portfolio managers have four investment priorities. Namely, extending bond duration, broadening US equity exposure, hedging tail risks and diversifying Asian equity exposure.
Willem Sels, global chief investment officer (pictured), said: “We think our investment priorities find the right balance between exploiting the opportunities while focusing on quality and limiting exposure to areas where risks are mispriced.
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“Of course, risks remain in our complex world, but as we have seen, markets are happy to take some uncertainty in their stride as long as the earnings and rate fundamentals remain constructive.”
Cheuk Wan Fan, chief investment officer for Asia, said: “Asia remains an important engine of global growth, and we capture structural growth opportunities through our themes focusing on the beneficiaries of the global supply chain reorientation, the rise of India and the ASEAN region, and future middle-class consumers.”
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