The inaugural Endowus Investment Summit 2024 introduced the “One Takeaway Challenge.” Different from the usual panel discussions, Endowus invited five distinguished experts on stage to share their most crucial stance for 2024. They only had one minute each, followed by a live poll of the audience to decide which was the most memorable.
Voted by the audience, the winner of the most memorable takeaway went to PIMCO, represented by Naveen Gulati, Head of Global Wealth Management Business. The runner-up was Partners Group, and the speaker was Henry Chui, the Swiss private markets specialist’s Head of APAC Private Wealth.
Other speakers included:
- William Vettorato, Managing Director, EQT
- Kylie Chan, Head of Wholesale & Retail Sales, Hong Kong, Natixis Investment Managers
- Kristy Wong, Senior Vice President, Intermediary Distribution, Greater China, Pinebridge
Winner–PIMCO: Cutting Cycles Scenarios
One takeaway from Naveen Gulati, Head of Global Wealth Management business for PIMCO in Hong Kong, is why you should now move the cash from the sidelines into high-quality bonds.
Gulati listed three reasons for this:
“In 2022 to mid-2023, we were in a macro environment where inflation was trending up. That triggered the Fed to aggressively increase rates, resulting in cash outperforming bonds. But today, we are in an environment where inflation is trending down. Over time, this will allow the Fed to lower rates, and we expect bonds to outperform cash as a result.
“Second, bond yields are at levels not seen in a while,” he said. “The current yield on our high-quality bond portfolio is at 7%, and there is a 94% correlation between the starting yield an investor buys in at and the five-year average forward returns.
“Finally, cash has to be reinvested every time your fixed deposit comes to maturity. This means that as the Fed lowers rates, your reinvestment rate on cash will drop from today’s levels," he said.
With cash rates reaching higher levels, and money-market funds yielding 4-5%, many investors are questioning the need to assume additional credit risk. Reinvestment risk is often overlooked in this context.
At Endowus, you can access PIMCO's strategies and other best-in-class funds via Endowus Fund Smart at a low, fair, and transparent fee. With our industry-first 100% Cashback on trailer fees, save up to 50% or more on your investment fees.
Read more: Reinvestment risk in cash
Runner-up–Partners Group: Benefits of Evergreen Investment Structures
One takeaway from Henry Chui, Head of APAC Private Wealth, Partners Group is how investors can benefit from evergreen funds.
Even though private markets are gaining traction globally and regionally, there has been a fundamental flaw: It takes investors a long time to invest the money and even longer to take the money back, with the prevailing closed-end fund structure.
To solve this issue, Chui points to evergreen investment structures. “An evergreen fund solves all these issues. No J-curve, investors’ money is fully invested on day one, and you are diversified across regions, sectors, and vintages. Investors essentially have companies that are at the beginning, middle, and end of the value creation cycle.
“Investors also have regular liquidity involved, either monthly or quarterly. What that means is, that because investors’ money are invested fully invested on day one, a 10% total return is actually equal to a 22% internal rate of return (“IRR”).
“The takeaway is: Do not confuse IRRs with total returns," Chui said
Evergreen funds are investment vehicles with no fixed end date. For individual investors, and family offices alike, this structure offers advantages like the ability of asset allocation rebalancing, immediate exposure to asset classes, flexible investment and redemption options, and diversified exposure.
These factors, along with the ability to stay invested long-term and benefit from compounding, make evergreen funds an enduring investment option in private markets.
Choose Endowus Hong Kong, allocating private markets in a smarter and easier way. On Endowus, you have access to private market offerings managed by top-tier managers. Contact our private wealth arm via privatewealth.hk@endowus.com to learn more.
Read more: Why evergreens can be the future of private markets
The inaugural Endowus Investment Summit, held on 17 April at Asia Society Hong Kong Center, hosted close to 500 clients, investors, and industry professionals. Enjoying the digest? Watch the full recap video of the discussion:
Building a long-term resilient portfolio
It is almost impossible to predict exactly how macro events would play out. As Howard Lee, the Deputy Chief Executive of Hong Kong Monetary Authority, emphasised in the Fireside Chat on Endowus Investment Summit, the most crucial aspect for investors is to maintain discipline in asset allocation, diversifying your investments across asset classes and geographies.
With market volatility comes opportunities. If you have a long-term investing horizon, as many of us do, these developments may offer an opportunity through steady, regular investing in diversified and risk-adjusted portfolios.
With digital wealth platform Endowus, you can plan and manage your money — by investing in Best-In-Class Funds and globally diversified, low-cost model portfolios seamlessly.
Click here to get started on your investing journey with Endowus Hong Kong today.
<divider><divider>
Risk Warnings
Investment involves risk. Past performance is not an indicator nor a guarantee of future performance. 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.
Opinions
Whilst Endowus HK Limited (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors.
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 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, 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 (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances.
No invitation or solicitation
Neither the information, nor any opinion, contained in this article constitutes a promotion, recommendation, solicitation, invitation or offer by Endowus or its affiliates to buy or sell any securities, collective investment schemes or other financial instruments or services, nor shall any such security, collective investment scheme, or other financial instruments or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. This is not intended to be an invitation or offer made to the public to subscribe for any financial product or other transaction.
This advertisement has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.
.png)
