The American dilemma – recession by policy tightening or stagflation by policy avoidance. US GDP growth is running so low now that a recession is a very high probability event within 12 months as rates rise further. The drivers of that coming recession will be both inflation and higher rates: There can be many different variations of the balance between the pace of rate hikes and the pace of inflation. As US economic growth slows further in coming months, the US Federal Reserve will be tormented over the awful choice between the longer-term impact of inflation and the more immediate risk of recession. Yet in the end, if rate hikes do not crush US economic growth, inflation will eventually do the same, albeit with a greater lag. In this article, our Senior Advisor Say Boon Lim explains why bounces in US equities are likely to be “get out of jail” cards, with lower lows and lower highs the most likely outcome.

Jun 29, 2022

Chinese equities have been putting on breakouts above technical resistances just as Developed Markets are breaking down and US stocks have been collapsing into bear territory – and this does not seem coincidental. At opposite ends of the policy cycle. At the heart of this may be the policy tightening in the US, the looming consequent recession, and the search for alternatives to US assets – stocks, Treasuries and corporate credits. China’s recent commitments to fiscal and monetary stimulus are a welcome counterpoint to the falling monetary aggregates, surging rates and yields, and fiscal consolidation in the US. In this article, our Senior Advisor Say Boon Lim discussed the significance of onshore A-shares breaking above the technical resistance of 100-day moving average, as it has a tendency to be followed by quite substantial periods of gains.

Jun 17, 2022

It’s again time for annual rebalance of our Premia Asia Innovative Technology and Metaverse Theme ETF (3181 HK) as well as our China A-shares ETFs - Premia CSI Caixin China New Economy ETF (3173 HK), Premia CSI Caixin China Bedrock Economy ETF (2803 HK), Premia China STAR50 ETF (3151 HK). The rebalances were successfully completed on Jun 10th 2022, and in this article we highlight the changes made and also provide brief analyses comparing the profiles before and after the rebalance exercise.

Jun 16, 2022

Metaverse has rapidly become a buzzword in the recent year, with significant development in technologies, user base and content around the world. In fact, many of the related Metaverse themes have long been among the sub-sectors covered by the Premia FactSet Asia Innovative Technology Index that our namesake ETF tracks. With the FactSet RBICS technology, it is possible to overcome the constraints and sometimes mislabelling of traditional GICS sector definition, and identify the relevant themes at more granular level including for technology conglomerates with multi-disciplinary functions. As part of the ongoing review, the index was recently updated and renamed as Premia FactSet Asia Metaverse and Innovative Technology Index (AMIT) to better reflect the core elements and spirits of the strategy. In this article we discuss more about the rationales behind the update, and how the strategy captures the innovative technologies and metaverse related opportunities in Asia.

Jun 16, 2022

Q1 has been an eventful start for the year 2022 where the world has experienced economic turbulence, regional conflict and continued COVID impact. United States is facing record high inflation tackled with aggressive monetary policy on interest rate hike and balance sheet reduction. We have also seen regional conflicts causing supply chain disruption in certain field such as oil and gas. In China, although in a much better inflation environment, Covid outbreak since late Q1 in Shanghai and some other cities had caused some disruption to China A share market.

May 13, 2022

Most asset classes did not perform well so far this year amid the rising interest rate environment and the Ukraine-Russia conflict, e.g., -12.8% in developed market equities, -10.1% in emerging market equities, -4.0% in global bonds, -29.1% in cryptocurrencies. The only exception was commodity, which went up over 32% year-to-date. Crude oil prices keep getting higher with no sign of a pullback in near-term, leading to a mounting inflation pressure to the global economic recovery. Investors are now thinking hard to reallocate their assets and shift away from the risky exposure. Riding the commodity rally by increasing the position in oil or gold may be one of the options, but the usual high volatility and negative carry are always the obstacles for placing any significant bets.

Mar 16, 2022

2021 has been a challenging year for many, with significant divergence within the Chinese equities universe and frequent growth/ value factor rotations through each quarter. We had also experienced regulatory and policy headwind and tailwind that drove significant market movements. Since the end of 2021, China’s equity market has experienced correction which has brought valuation back to attractive level. Both our Premia CSI Caixin China New Economy ETF (3173 HK) and Premia China Bedrock Economy ETF (2803 HK) continue to provide effective diversification tools to global investors and we illustrate a 50/50 blended portfolio that would outperform the broader market and its peers consistently.

Mar 02, 2022

[Watch Now]The US Federal Reserve has signalled the imminent start of the transition from the Great Stimulus of 2020-2021 to policy tightening with rate hikes and tapering at a suggested pace that was at the high end of previous expectations. On the contrary as we kickstarted 2022, China has cut rates and it is expected that more easing measures would be introduced. Meanwhile foreign investors have also shown unprecedented appetite for Chinese government bonds as foreign holdings surged from less than 3% in 2016 to 10.8% at the end of 2021. Would this continue? What would be the outlook? What are the tailwind and headwind factors to consider for investors and asset allocators?  Data & Venue23 Feb 2022, Hong Kong Opening RemarksPhoebe Leung, Senior Vice President, Head of Sales & Marketing, Bond Connect Company Limited Panel Discussion - CGB and RMB - 2022 Outlook and Allocation StrategyTracy Yeung, Assistant Vice President, Sales & Marketing, Bond Connect Company Limited (Moderator)Laura Lui, Partner & Co-CIO, Premia Partners Company LimitedChun Hong Chan, Partner, Co-Chief Executive Officer, CIO, Multi-Asset Strategies and Head of External Managers, Avanda Investment ManagementEdmund Ng, Founder & Chief Investment Officer, Eastfort Asset ManagementJonas von Oldenskiöld, Head of SwissRe Korea, former head of SwissRe Asset Management Asia Long Duration CGB ETF - Use Cases, Flows, Liquidity and Trading StrategyDavid Lai, Partner & Co-CIO, Premia Partners Co. Ltd.

Feb 25, 2022

In the US the “triple peaks” in economic growth, earnings growth and policy stimulus will likely result in much lower returns for US equities in 2022. The persistently high inflation – which will likely run hotter in the US than Europe and Japan – is already causing greater volatility as US equities are put on tenterhooks over the timing and magnitude of rate hikes. Meanwhile US Dollar could weaken on inflation rather than strengthen on higher Treasury yields. On the other hand, Emerging Markets, usually do better during periods of Dollar weakness but this time we could see a new twist - this favours China, supported by easier financial conditions. On top of all these, how is the Omicron Virus going to impact the global markets and what are the implications for global asset allocations in 2022? Why ASEAN would be a good diversification within Emerging Markets? Further to Part 1 of our 2022 outlook piece earlier, in this Part 2 sequel our Senior Advisor Say Boon Lim laid out the scenarios and discussed how we can reposition for the global shifts accordingly to address the transition to tightening and pivot from US equities.

Dec 16, 2021