UOBAM Invest Digital Adviser Performance

  • UOBAM Invest Digital Adviser PerformanceUOBAM Invest Digital Adviser Performance

Q3 2022 Market developments

 

  • Global equities declined for the third consecutive quarter
  • US Treasury yields surged due to fears of tighter monetary policies
  • Global Bonds lost almost as much as Global Equities

 

Asset class performance (% in SGD terms) 30 June – 30 September 2022

 

Second Quarter Portfolio Returns (%)

 

 

Source: UOBAM/Bloomberg. Performance as at 30 September 2022.

Indices used as follows:
Asian High Yield J.P.Morgan Asia Credit (JACI) Non-Investment Grade Index,
Asian Equities MSCI AC Asia ex Japan Index,
Global Bonds Bloomberg Global Aggregate Index,
Asian Bonds J.P.Morgan Asia Credit (JACI) Investment Grade Index,
Global Equities MSCI All Country World Index (ACWI) on a Net Asset Value basis.

Please note that there are limitations to the use of such indices as proxies for the past performance in the respective asset classes. The historical performance presented should not be used as a proxy for the future or likely performance.

 

 

It was yet another difficult quarter for all asset classes. Global equity markets were triggered by investor concerns over persistently high inflation, rising interest rates and global economic growth. Meanwhile, central banks around the world continued to raise rates, leading to lower bond prices.

US Federal Reserve (Fed) Chair Jerome Powell dashed market hopes by reiterating that the central bank would not slow its pace of rate hikes until it was confident that inflation was under control. This is despite acknowledging the unfavourable impact the policy will have on consumers and businesses.

In contrast, the People’s Bank of China (PBOC) cut interest rates in an attempt to revive the country’s economy. China’s strict COVID containment policies and property market disarray had weakened consumer, business, and investment activities.

The rest of the North Asian markets also came in weaker, mostly driven by concerns over tepid economic growth, and an overall slowdown in the global technology cycle. Together, these brought Asian equities down by another 10 percent in Q3.

 

Performance for Individuals

 

 

Environmental, Social, and Governance (ESG) Portfolios

  • As of 30 September 2022, UOBAM Invest portfolio returns for the third quarter, 2022 ranged between -2.6 percent and -5.3 percent

 

Portfolio returns (% in SGD terms) 30 June – 30 September 2022

 

Second Quarter Portfolio Returns (%)

 

 

Source: Factset/Bloomberg/UOBAM. Portfolio returns as at 30 Sep 2022.

Benchmark composition:
Very Conservative: 20% MSCI ACWI + 80% Bloomberg Global Aggregate Index,
Conservative: 40% MSCI ACWI + 60% Bloomberg Global Aggregate Index,
Moderate: 60% MSCI ACWI + 40% Bloomberg Global Aggregate Index,
Aggressive: 80% MSCI ACWI + 20% Bloomberg Global Aggregate Index,
Very aggressive: 100% MSCI ACWI on a Net Asset Value basis.

Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Portfolio returns on the scheme is calculated on a single pricing basis.

 

 

1. Very Conservative portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -2.6 -3.6
6 months -10.6 -9.5
1 year -17.0 -12.9
Since Inception
(26 July 2020)
-6.7 (annualised) -4.1

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 20% MSCI ACWI + 80% Bloomberg Global Aggregate Index | US REITs: US Real Estate Investment Trusts

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio performed better than the benchmark. It was weighed down by Asian equities, as well as European equities despite the small allocation. However, being out of US equities before they were sold off in August helped to mitigate losses.

Over the one-year period, the portfolio has underperformed mainly due to its weak emerging market government bond performance relative to global bonds. We have since capped the emerging market bond allocation to 10 percent.

 

2. Conservative portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -3.9 -3.7
6 months -9.4 -11.3
1 year -12.0 -13.6
Since Inception
(26 July 2020)
-2.5 (annualised) -2.1

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 40% MSCI ACWI + 60% Bloomberg Global Aggregate Index | US REITs: US Real Estate Investment Trusts

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio has been weighed down by its allocation to Asian and global equities, as well as global investment grade bonds. However, being out of US equities before they were sold off in August helped to mitigate losses.

 

3. Moderate portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -4.4 -3.8
6 months -11.2 -13.1
1 year -12.7 -14.4
Since Inception
(26 July 2020)
-1.1 (annualised) -0.1

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 60% MSCI ACWI + 40% Bloomberg Global Aggregate Index | US REITs: US Real Estate Investment Trusts

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio has been weighed down by its allocation to Asian and global equities, as well as global investment grade bonds. However, being out of US equities before they were sold off in August helped to mitigate losses.

 

4. Aggressive portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -5.3 -3.8
6 months -16.8 -14.9
1 year -18.7 -15.3
Since Inception
(26 July 2020)
-0.8 (annualised) -1.9

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 80% MSCI ACWI + 20% Bloomberg Global Aggregate Index | US REITs: US Real Estate Investment Trusts

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio has been weighed down by its sizeable equity allocation. Its exposure to Asian equities caused the bulk of the underperformance.

 

5. Very Aggressive portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -4.8 -3.9
6 months -13.5 -16.7
1 year -12.9 -16.1
Since Inception
(26 July 2020)
-0.8 (annualised) -3.8

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 100% MSCI ACWI on a Net Asset Value basis US REITs: US Real Estate Investment Trusts

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio has been weighed down by its sizeable equity allocation. Given the weakened market confidence in August, the allocation to US equities caused the bulk of the underperformance.

Over the one-year period, this portfolio has underperformed mainly due to the weak Asian equities performance relative to global equities. We have since capped the allocation to Asian equities to 20 percent of the portfolio.

 

Looking ahead

 

  • We expect the global economy to slow but employment should remain resilient
  • We believe equities are likely to be rangebound for the rest of the year before beginning any sustained uptrend
  • We are becoming more positive of bonds amid attractive yields and a potential peak in rates

 

Looking forward into 4Q 2022, we believe that core inflation will persist, but overall inflationary pressure appears to be moderating. As such, we expect central banks to continue hiking rates through early 2023. While the risks of a recession are growing, we expect the services economy to remain resilient.

As such, we expect equities to be rangebound for the rest of the year before any sustained uptrend takes place. For fixed income, we are becoming more positive as yields climb and approach peak rates. We continue to expect the US dollar to be supported by relatively tighter monetary policy compared to other regions.

Over in Asia, we note that Chinese equities are trading at a significant discount to US/Global equities. We expect the Chinese government to announce more stimulus measures to help stimulate growth.

We recommend investors to build their wealth by remaining invested for the long term and take advantage of the market weakness by dollar cost averaging.

Performance for Corporates

 

 

Environmental, Social, and Governance (ESG) Portfolios

  • As of 30 September 2022, the UOBAM Invest portfolio returns for the third quarter, 2022 ranged between -3.4 percent and -5.5 percent

 

Portfolio returns (% in SGD terms) 30 June – 30 September 2022

 

Second Quarter Portfolio Returns (%)

 

 

Source: Factset/Bloomberg/UOBAM. Portfolio returns as at 30 September 2022.

Benchmark composition:
Very Conservative: 20% MSCI ACWI + 80% Bloomberg Global Aggregate Index,
Conservative: 40% MSCI ACWI + 60% Bloomberg Global Aggregate Index,
Moderate: 60% MSCI ACWI + 40% Bloomberg Global Aggregate Index,
Aggressive: 80% MSCI ACWI + 20% Bloomberg Global Aggregate Index,
Very aggressive: 100% MSCI ACWI on a Net Asset Value basis.

Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Portfolio returns on the scheme is calculated on a single pricing basis.

 

 

1. Very Conservative portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -3.4 -3.5
6 months -9.8 -7.7
1 year -17.3 -12.2
Since Inception
(18 Dec 2019)
-6.3 -3.2

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 20% MSCI ACWI + 80% Bloomberg Global Aggregate Index | US REITs: US Real Estate Investment Trusts

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio performed better than the benchmark. It was weighed down by international government bonds and emerging markets government bonds. However, the allocation to money market funds helped to mitigate losses.

 

2. Conservative portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -3.5 -3.6
6 months -9.4 -9.5
1 year -13.8 -12.9
Since Inception
(18 Dec 2019)
-2.3 -1.7

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 40% MSCI ACWI + 60% Bloomberg Global Aggregate Index

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio performed better than the benchmark. It was weighed down by international government bonds, emerging markets government bonds and Asian equities. However, the allocation to money market funds helped to mitigate losses.

 

3. Moderate portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -3.5 -3.7
6 months -11.6 -10.8
1 year -17.0 -13.5
Since Inception
(18 Dec 2019)
-3.1 -0.6

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 60% MSCI ACWI + 40% Bloomberg Global Aggregate Index

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio performed better than the benchmark. It was weighed down by international government bonds, emerging markets bonds and Asian equities. However, the allocation to US government bonds and emerging markets high yield bonds helped to mitigate losses.

 

4. Aggressive portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -4.7 -3.7
6 months -12.5 -12.2
1 year -18.2 -14.0
Since Inception
(18 Dec 2019)
-2.0 -0.5

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 80% MSCI ACWI + 20% Bloomberg Global Aggregate Index

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio has been weighed down by international government bonds and Asian equities. However, the allocation to US government bonds and emerging markets high yield bonds helped to mitigate losses.

 

5. Very Aggressive portfolio

 

Period Portfolio Return (%) Benchmark Returns (%)
3 months -5.5 -3.8
6 months -16.6 -14.4
1 year -22.7 -15.1
Since Inception
(18 Dec 2019)
-1.5 -2.0

Second Quarter Portfolio Returns (%)

Source: UOBAM as of 30 September 2022. Benchmark composition: 100% MSCI ACWI on a Net Asset Value basis

Since inception returns are annualised | The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

 

Over the past three months, this portfolio has been weighed down by its sizeable global equity allocation. Its exposure to Asian and US equities caused the bulk of the underperformance. However, the allocation to emerging markets high yield bonds helped to mitigate losses.

 

Looking ahead

 

  • We expect the global economy to slow but employment should remain resilient
  • We believe equities are likely to be rangebound for the rest of the year before beginning any sustained uptrend
  • We are becoming more positive of bonds amid attractive yields and a potential peak in rates

 

Looking forward into 4Q 2022, we believe that core inflation will persist, but overall inflationary pressure appears to be moderating. As such, we expect central banks to continue hiking rates through early 2023. While the risks of a recession are growing, we expect the services economy to remain resilient.

As such, we expect equities to be rangebound for the rest of the year before any sustained uptrend takes place. For fixed income, we are becoming more positive as yields climb and approach peak rates. We continue to expect the US dollar to be supported by relatively tighter monetary policy compared to other regions.

Over in Asia, we note that Chinese equities are trading at a significant discount to US/Global equities. We expect the Chinese government to announce more stimulus measures to help stimulate growth.

We recommend investors to build their wealth by remaining invested for the long term and take advantage of the market weakness by dollar cost averaging.

This document is for your general information only. It does not constitute investment advice, recommendation or an offer or solicitation to deal in Exchange Traded Funds ("ETFs") or in units in any Unit Trusts ("Unit Trusts", ETFs and Unit Trusts shall together be referred to as "Fund(s)") nor does it constitute any offer to take part in any particular trading or investment strategy.

This document was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. The information is based on certain assumptions, information and conditions available as at the date of this document and may be subject to change at any time without notice. If any information herein becomes inaccurate or out of date, we are not obliged to update it. No representation or promise as to the performance of the Fund or the return on your investment is made. Past performance of any Fund or UOB Asset Management Ltd ("UOBAM") and any past performance, prediction, projection or forecast of the economic trends or securities market are not necessarily indicative of the future or likely performance of the Fund or UOBAM. The value of any Fund and the income from them, if any, may fall as well as rise, and may have high volatility due to the investment policies and/or portfolio management techniques employed by the Fund. Investments in any Fund involve risks, including the possible loss of the principal amount invested, and are not obligations of, deposits in, or guaranteed or insured by United Overseas Bank Limited ("UOB"), UOBAM, or any of their subsidiary, associate or affiliate ("UOB Group") or distributors of the Fund. Market conditions may limit the ability of the platform to trade and investments in non-Singapore markets may be subject to exchange rate fluctuations. The Fund may use or invest in financial derivative instruments and you should be aware of the risks associated with investments in financial derivative instruments which are described in the respective Fund’s prospectus. The UOB Group may have interests in the Funds and may also perform or seek to perform brokering and other investment or securities-related services for the Fund. Investors should read the Fund’s prospectus, which is available and may be obtained from UOBAM or any of its appointed agents or distributors, before investing. You may wish to seek advice from a financial adviser before making a commitment to invest in any Funds, and in the event that you choose not to do so, you should consider carefully whether the Fund is suitable for you. Any reference to any specific country, financial product or asset class is used for illustration or information purposes only and you should not rely on it for any purpose. We will not be responsible for any loss or damage arising directly or indirectly in connection with, or as a result of, any person acting on any information provided in this document. Services offered by UOBAM Invest are subject to the UOBAM Invest Terms and Conditions.

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

UOB Asset Management Ltd Co. Reg. No. 198600120Z