{"id":48720,"date":"2021-07-23T11:00:09","date_gmt":"2021-07-23T03:00:09","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=48720"},"modified":"2021-08-04T17:01:32","modified_gmt":"2021-08-04T09:01:32","slug":"investment-trends-2021-h2","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/investment-trends-2021-h2","title":{"rendered":"What Investment Trends Should You Look Out For In The Second Half Of The Year?"},"content":{"rendered":"

In partnership with<\/strong> \"\"<\/p>\n

It\u2019s been a bumpy ride for markets. Despite the COVID-19 pandemic and economic recession, the global stock market has continued to soar in the first half of 2021.<\/p>\n

But we\u2019re not out of the woods yet. In Malaysia, as well as other parts of the world<\/a>, COVID-19 cases have risen again.<\/p>\n

The silver lining is that vaccination roll-outs are picking up, both locally and overseas. What does this mean for your portfolio? Here are some investing insights from Principal Asset Management Berhad (Principal) on trends you should look out for during the second half of the year and beyond.<\/p>\n

<\/span>Positive global outlook in the third quarter<\/span><\/h2>\n

It has been a good first half for global equity markets. The FTSE All-World index<\/a>, which represents the performance of global equities, rose almost 12% year-to-date as of July 8, 2021. In the US, the S&P 500 (a stock market index that represents the 500 largest companies listed on the stock exchange in the US) also rose almost 15%<\/a> year-to-date and reached a record high.<\/p>\n

Some investors are worried<\/a> that this upward trend will not continue. However, Principal believes that the market outlook continues to look positive, as it is supported by strong earnings growth. During the first quarter of the year, the S&P 500 had exceeded<\/a> its earnings expectations. Analysts expect that it will continue to deliver strong earnings in the second quarter.<\/p>\n

In addition, the rise in bond yields earlier in the year reflects better growth prospects and economic recovery. This is further bolstered by President Joe Biden\u2019s approval of the US$ 1.9 trillion stimulus package<\/a>, which will help the US recover economically.<\/p>\n

As an investor, you can take advantage of potential global growth through the Principal Global Titans Fund, which invests in the US, Europe and Japan.
\n\n\n\n\n\t\n\n\t
Fund<\/th>Region<\/th>Fund objective<\/th>\n<\/tr>\n<\/thead>\n
Principal Global Titans Fund<\/td>US, Europe and Japan<\/td>To grow your investments over the medium to long-term by investing in the US, Europe and Japan.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

<\/span>Asia and ASEAN markets expected to continue its recovery<\/span><\/h2>\n

The recent wave of COVID-19 infections has been challenging for many Asian countries but there has been progress in recent months to get the population vaccinated. The vaccine roll-out has accelerated<\/a> in many Asian countries.<\/p>\n

Therefore, Principal maintains their view that the investment environment for Asian equities remains favourable. Economic recovery will continue, thanks to the rollout of vaccines, coupled with continued monetary and fiscal support.<\/p>\n

Most ASEAN markets were undervalued<\/a> in 2020, and therefore have deep-value opportunities this year. Principal believes that there are opportunities for those looking for long-term value in the tourism, e-commerce, and commodities sectors. But markets in the Northern regions of Asia might perform better. Southeast Asia is expected to recover more slowly as its vaccination rate is still low \u2013 as of July 14, it was only 9%<\/a>. However, vaccination rates are picking up.
\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t
Fund<\/th>Region<\/th>Fund objective<\/th>\n<\/tr>\n<\/thead>\n
Principal Asia Pacific Dynamic Income Fund<\/td>Asia Pacific ex-Japan<\/td>Aims to provide regular income by investing primary in the Asia Pacific ex Japan region. At the same time, aims to achieve capital appreciation over the medium to long-term.<\/td>\n<\/tr>\n
Principal Islamic Asia Pacific Dynamic Equity Fund<\/td>Asia Pacific ex-Japan<\/td>A Shariah-compliant fund that invests in emerging and developed markets.<\/td>\n<\/tr>\n
Principal Greater China Equity Fund<\/td>China, Hong Kong, and Taiwan<\/td>Strategically invests in the Greater China region, where you\u2019ll have the chance to be part of China\u2019s economic growth.<\/td>\n<\/tr>\n
Principal DALI Asia Pacific Equity Growth Fund<\/td>Malaysia<\/td>Potentially aims to achieve consistent capital growth over the medium- to long-term.<\/td>\n<\/tr>\n
Principal Asia Titans Fund<\/td>Asia ex-Japan<\/td>To seek capital growth by investing primarily in equities and equity-related investments.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

<\/span>Malaysian equities remain cheap<\/span><\/h2>\n

While the number of cases in Malaysia has increased again recently, Malaysia is also accelerating the pace<\/a> of its vaccine roll-out. As of 2 July, around eight million doses have been administered \u2013 that\u2019s 18.7% of the Malaysian population who have received at least one dose, and 7.5% who have been fully dosed. The government expects another 12 million vaccine doses to arrive in July. As the pace picks up, this will lead to economic recovery and a rebound in corporate earnings.<\/p>\n

Besides that, Malaysian equities remain cheap. Foreign sellers have sold RM4.3 billion<\/a> from the local stock market year-to-date, a huge increase from RM16.5 million during the same period last year. This has partly driven the recent volatility in the Malaysian market.<\/p>\n

According to Principal, this foreign selling has been overdone. Opportunities still abound in small cap and balanced income funds, companies that are trading below their fair values and cyclical beneficiaries that are tied to economic reopening, which will provide growth and income opportunities.<\/p>\n

<\/span>What should you pay attention to in the next five years?<\/span><\/h2>\n

Having a pulse on short-term investment trends is useful for navigating volatile periods. But what about beyond that? Principal shared several sectors and markets that investors should pay attention to in the next few years.<\/p>\n