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Latest market commentary (Dec 2024)
Heading into the final Fed meeting of the year, which is scheduled on 18 Dec, bond traders are looking for another interest-rate cut, but no more than 25 basis points. Futures markets currently predict an 84% chance of the central bank cutting interest rates by a quarter point, according to the CME FedWatch tool. There is also a remaining probability that suggests the possibility of a pause in rate cuts. This forecast follows rate cuts announced in the Sep and Nov meetings, which brought the rate to a range of 4.50-4.75%.
US job growth in November surged after the employment market was constrained by hurricanes and strikes last month. This may not signal a significant shift in labour market conditions, but should give the Federal Reserve leeway to cut interest rates again this month.
Core personal consumption expenditures price index, or what people referred to as the Federal Reserve’s preferred inflation gauge, accelerated in October year on year. Stripping out volatile food and energy items, the Core PCE reading increased 2.8% from October 2023, and 0.3% from a month earlier, according to Bureau of Economic Analysis data out 27 Nov. A good part of that acceleration was due to the impact of higher stock prices on the calculation. These gauges might help explain the seemingly more cautious approach of the central bank to lowering interest rates, in line with traders’ expectation of a mild cut closing off the year.
Cash management solutions on the Endowus platform
Here are the key money market, liquidity, and fixed income funds available on the Endowus platform for Hong Kong investors to consider:
For HKD:
For USD:
- GaoTeng WeValue USD Money Market Fund
- Abrdn Liquidity Fund USD
- Ping An USD Money Market Fund
- Amundi Cash USD Fund
- HSBC Global Money US Dollar
Why do people invest in money market funds?
- Maintaining an emergency fund: Life is full of uncertainties, and having a liquidity fund can be a personal safety net to get through any unforeseen emergencies, such as a period of unemployment or an unbudgeted large expense. The general rule of an emergency liquidity reserve is about 3 to 6 months of monthly expenses. The accessibility and flexibility of money market funds make them a good option while not having to sacrifice yields. Please be aware that while the risk is relatively low, money market funds are not principal-protected and may incur losses.
- Short-term investment/life goals: Money market funds could be useful for short-term goals such as saving for a vacation or wedding. It is important to ensure the investment holds its value over a shorter time period.
- Parking of assets: Money market funds are also good vehicles to park or transfer assets when you are deciding on how to deploy your funds for the longer term. We do not recommend money market funds as the investment vehicle for your long-term wealth goals. Although their stability might be appealing in the short run, over the long-term their returns would be much lower than stocks and bonds.
The smart and flexible way to earn more on your cash
Looking to supercharge your cash savings? The HSBC Global Money US Dollar, with a net yield of 4.53% p.a.*#, could be a great addition depending on your needs and objectives. You can add it to your portfolio by following these steps.
If you’re interested in model portfolios, CashUp - Simple is another good option, with a current net yield of 4.7 - 4.9% p.a.*#, CashUp - Plus is available as well for investors who are willing to take more risk relative to the CashUp - Simple solution, with a current net yield of 4.8 - 5.1% p.a.*#. Critically, Endowus offers our cash management solutions at fees of just 0.10% p.a., making our offerings highly competitive for your low-risk investments. This is on top of our longstanding practice to rebate any trailer fees back to our clients. Learn more about our Endowus CashUp Portfolios here.
Make your cash work smarter for you. If you have money set aside for an upcoming expense, earn higher returns on it instead of letting it sit idle in your current or savings account. To get started with Endowus, click here.
*As of 30 Nov 2024. Net yield after deducting fund-level fees and Endowus access fee, and adding back rebates. Source: Endowus Research and HSBC Asset Management.
# Yields are not equal to the actual return. Not guaranteed returns. Past performance does not indicate future performance.
Read more:
- How to choose between money market funds
- Endowus Fund Smart — Most Popular and Best Performing Funds of 2023
- Webinar: Supercharge your cash in a 5% interest rate environment
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Risk Warnings
Investment involves risk. Past performance is not an indicator nor a guarantee of future performance or returns. Projected performance or returns is not guaranteed to materialise. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested.
Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
General risk warnings relating to collective investment schemes
Before making an investment decision, you are reminded to refer to the relevant prospectus/ offering document for specific risk considerations and related fees and charges.
Funds are not a bank deposit and not capital guaranteed, and is subject to investment risks, including the possible loss of the principal amount invested.
Some of the funds also involve derivatives. Do not invest in them unless you fully understand and are willing to assume the risks associated with them.
Opinions
Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus HK Limited (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus HK Limited, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.
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Nothing contained [in this article] should be construed as a solicitation, an offer to buy or sale, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction in any jurisdiction in which such solicitation, offer to buy or sale would be unlawful under the securities laws in such jurisdiction. No information included [on this website/ in this article] is to be construed as investment advice or as a recommendation or a representation about the suitability or appropriateness of any advisory product or service; or an offer to buy or sell, or the solicitation of an offer to buy or sell, any security, financial product, or instrument; or to participate in any particular trading strategy. Investors should seek independent financial and tax advice before making any investment decision.
Product Risk Rating: Please note that any product risk rating (the “PRR”) provided by us is an internal rating assigned based on our product risk assessment model, and is for your reference only. The PRR is subject to change from time to time. The PRR does not take into account your individual circumstances, objectives or needs and should not be regarded as advice or recommendation to purchase, hold or sell any fund or make any other investment decisions. Accordingly, you should not solely rely on the PRR in making your investment decision in the relevant Fund.
Complex Products
Some of the funds contained in this article are complex products and investors should exercise caution when investing in these products. Though these products have been authorised by the SFC, authorization does not imply official recommendation. SFC authorization is not a recommendation or endorsement of a product nor does it guarantee the commercial merits of a product or its performance.
This advertisement has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.
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