September was probably the best month for most equity markets. Both stocks and equity funds have regained their grounds and recouped their losses.

Leading the winners were equity funds of South East Asia like Thailand and Philippines, which have surged more than 20% in the third quarter.

Though falling behind other equity markets, the US government has vowed to implement their controversial QE2 (Quantitative Easing) with the aim to boost the economy. US Treasuries have rallied for four weeks on Feb Deb-Purchase outlook.

Gold, of course, cannot be overlooked as it has reached a record high of $1,366 an ounce.

At the same time, the darkness of fear is spreading.

The currency war has started, while BOJ (Bank of Japan) jumped back into zero interest rates to depreciate the JPY currency, however, the US dollar has dropped to a 15-year low against the yen.

Oil price is also quietly climbing up (though overshone by Gold).

Contrary to US and Japan, China has maintained its tight monetary policy to cool down the property market. People have started to wonder if the stock market has moved up too fast without sufficient fundamentals.

All these have left investors with much uncertainty about where the market is going. On one hand, investors still remember the 2008 stock market collapse vividly. On the other hand, no one wants to be left behind the wagon should the markets soar.

Diversification and Asset Allocation is the key. Investors should have an actively managed basket of equities, fixed income, property and commodities in the global markets.

However, in the current dynamic market, it is very hard for a normal retail investor to construct and Re-balance such a portfolio in an efficient manner. Fortunately, actively managed multi-asset funds are available.

Take 4 stars rated MorningStar Schroders Multi-Asset Revolution Fund for example. The fund is comprises mainly of:

  • Asian Bond Absolute Return
  • Global Bond
  • Emerging Markets Debt Absolute Return
  • Global Inflation Linked Bond
  • Global Equity Alpha
  • Global Property Securities
  • Pacific Equity
  • Singapore Fixed Income Fund
  • Global Smaller Companies
  • Euro Corporate Bond

The fund is also featured by TheEdge Singapore this week.

From the 3-year fund performance chart below, you can see that the diversified nature of the fund allows it to cushion the stock market plunge during the 2008 financial crisis and still ride on the market rebound, as  compared to the MSCI World Index and Emerging Market Index.

3 Year Fund Performance – Schroder Multi-Asset and DWS Premier Select (source: iFast)

You may also take note of the 3-year volatility of merely 12% to 14%, which implies lower portfolio risk.

The chart above also includes the DWS Premier Select Trust which is managed by Deutsche Asset Management. The fund has outperformed benchmarks for the past 12 years since it changed its mandate in 1998. With its strategic allocation for

  • Singapore equity
  • Gold
  • Asian Property, etc,

it could help well complement Schroders Multi-Asset Revolution Fund which focuses on other regions.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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