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Investment opportunities

April 2025

Despite heightened volatility opportunities can still be found

Despite greater volatility and short-term downside risk for equities, we remain Overweight in US and Asia-ex Japan where the risk reward remains sufficiently constructive over a 12-month horizon. We have also upgraded US Treasuries and Developed Markets (DM) Investment Grade (IG) bonds from Underweight to Neutral for those seeking higher quality bonds given current uncertainties.

Structured Investments

Theme: China’s Financial sector leveraging on stimulus policies

China’s plans to refine its financial strategies will create opportunities for Hong Kong’s Exchanges and regional financial entities through increased listings and supportive initiatives. The People's Bank of China (PBOC) has introduced innovative policies to enhance wealth management and improve cross-border bond investments. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) is urging the central government to promote more Chinese company listings on the Hong Kong stock exchange. This positive trend is expected to benefit sectors like wealth management, sustainable finance, family offices, fintech, and insurance.

  • Hong Kong Exchanges and Clearing Limited (HKEX) is one of Asia's largest stock exchanges and the 9th largest globally by market capitalization. It connects international investors to mainland Chinese companies and facilitates capital raising, operating under Hong Kong's regulatory framework that offers greater access for foreign investors. Management outlined key initiatives for the year, which includes implementing phased minimum spread reductions, starting around mid-2025; exploring a shorter settlement cycle to align with US standards, with consultations anticipated by mid-2025, and reviewing IPO rules to attract more listings.
  • Industrial and Commercial Bank of China (ICBC) is China's largest commercial bank by assets, loans, and deposits, with CNY 35 trillion in assets, CNY 21 trillion in loans, and CNY 26 trillion in deposits as of 2021. It excels in both consumer and corporate banking services. China's financial regulators implemented measures to stabilize the stock market by encouraging long-term funds, such as annuities, insurers, mutual funds, and pension funds to increase investments in domestic equities. This could result in over CNY 1 trillion in additional inflows for the onshore A-share market. H-share Chinese banks provide a dividend yield about 1.4 percentage points higher than A-share banks.

Bonds

BP is a global energy company with a wide reach across the world’s energy system. BP has been actively paying dividends and buying back its shares.

BP Capital Markets Plc (GBP)

This bond pays a coupon of 5.773% p.a. with maturity on 25 May 2038.

BP has operations in Europe, North and South America, Australasia, Asia and Africa. The company is divided into 3 main lines of business:

  • Gas & Low Carbon Energy segment, which comprises of BP's gas and low carbon businesses. BP's gas business includes regions with upstream activities that predominantly produce natural gas, integrated gas and power, and gas and power trading. BP's low carbon business includes solar, offshore, and onshore wind, hydrogen and carbon capture and storage (CCS) and BP's share in BP Bunge Bioenergia.
  • Oil Production & Operations segment, which comprises regions with upstream activities that predominantly produce crude oil, including BPX energy.
  • Customers & Products segment, which comprises BP’s customer focused businesses - spanning convenience and mobility, which includes convenience and retail fuels electric vehicle (EV) charging, as well as Castrol, aviation, and B2B and midstream businesses. It also includes BP's oil products businesses, refining and trading.

BP has been actively paying dividends and buying back its shares. BP plans at least US$14b of share buybacks through 2025 and remains committed to using 80% of surplus cash flow for shareholder distributions. The cash position of the company is more than enough to meet short term debt.

Funds

Multi-asset Funds

Lion-Bank of Singapore CIO Supertrends Multi Asset Fund

The Lion-BOS CIO Supertrends Multi-Asset Fund is a multi-asset strategy that aims to provide income and long-term capital growth by investing in a diversified portfolio of asset classes including global equities, ETFs, global bonds, the writing of equity covered call options and other collective investment schemes. Guided by research from Bank of Singapore’s award-winning Chief Investment Office, the fund takes a rigorous research-based approach to identify quality companies within equities and fixed income with resilient business models and robust fundamentals. The fund also has distribution share classes for investors looking for dividend income.

PIMCO Balanced Income & Growth Fund

The PIMCO Balanced Income & Growth Fund is a global multi-sector strategy that seeks to combine PIMCO’s total return investment process and philosophy with income maximization. The Portfolio construction is founded on the principle of diversification across a broad range of equity and global fixed income securities. The fund has a historical annualised dividend yield of 7.24% p.a.

Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 31 March 2025.

Bond Funds

PIMCO GIS Income Fund

The PIMCO GIS Income Fund is designed for investors who seek steady income with a secondary goal of capital appreciation. It takes a broad-based approach to investing in income-generating bonds. The fund aims to achieve this by employing PIMCO’s best income-generating ideas across global fixed income sectors. The fund has a historical annualised dividend yield of 6.51% p.a.

Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 31 March 2025.

M&G (Lux) Optimal Income

The M&G (Lux) Optimal Income Fund is a global bond fund that aims to provide a combination of capital growth and income to deliver a return based on exposure to optimal income streams in investment markets, while applying environmental, social and governance (ESG) criteria. The fund has a historical annualised dividend yield of 5.93% p.a.

Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 31 30 March 2025.

Equity Funds

AB Low Volatility Equity Portfolio Fund

The AB Low Volatility Equity Portfolio fund is a global equity fund seeking capital growth through securities of companies that the fund manager believes have lower volatility. Its investment approach focuses on quality, stability and price, where the fund seeks high quality stocks of companies with stable performance and predictable earnings, trading at attractive prices. The fund also has distribution share classes for investors looking for dividend income.

Neuberger Berman Global Equity Megatrends Fund

The Neuberger Berman Global Equity Megatrends fund seeks to achieve long-term capital appreciation through investment in a high conviction, global all-cap equity portfolio of an expected 20-30 companies that are directly supported by multiple long-term, global secular shifts. The investment team follows a risk-managed approach to develop conviction, with particular focus on valuation discipline.

LionGlobal Asia Pacific Fund

The LionGlobal Asia Pacific Fund invests primarily in the equities markets of the Asia Pacific (ex-Japan) region across both emerging and developed markets, with no target industry or sector. The fund aims to achieve capital appreciation by adopting a disciplined investment process and a high conviction approach, focusing on identifying growth opportunities at reasonable prices.

Currencies

The US Dollar (USD) index (DXY) extended its decline in March as the unwinding of US exceptionalism trades accelerated. Markets are increasingly focused on how Trump’s tariffs are hurting US economy. US data has also been weaker than expected. Ultimately for currency markets, relative growth matters. If growth in the US slumps because of its own doing (i.e. protectionist measures) while growth for the rest of the world holds up (on a relative basis), then the USD may end up weaker over time. From a currency point of view, markets appear to shift from trading tariff fears to trading US recession concerns, and to some extent even trading the de-dollarisation narrative. To put things in perspective, US protectionist measures, fading US exceptionalism and ballooning US debt are some catalysts that may call into question the USD’s status as a reserve currency. More broadly, we continue to expect a divergent USD play, with USD weaker against major currencies, including the Euro (EUR), Swiss Franc (CHF) and Japanese Yen (JPY) while USD may still maintain a firmer tone versus Asia ex-Japan currencies, taking into consideration the potential implication of Trump tariffs on global growth, global trade and sentiments. That said, the currency bias may change depending on how trade negotiations and the de-dollarisation theme pans out.

Gold price yet to peakTop Fund Ideas For 1Q2025
Important Information

This advertisement has not been reviewed by the Monetary Authority of Singapore.

This document may be translated into the Chinese language. If there is any difference between the English and Chinese versions, the English version will apply.

  1. Any opinions or views of third parties expressed in this document are those of the third parties identified, and do not represent views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).
  2. This information is intended for general circulation and / or discussion purposes only. It does not consider the specific investment objectives, financial situation or needs of any particular person.
  3. Before you make an investment, please seek advice from your Relationship Manager regarding the suitability of any investment product taking into account your specific investment objectives, financial situation or particular needs.
  4. If you choose not to do so, you should consider if the investment product is suitable for you, and conduct your own assessments and due diligence on the investment product.
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Global Equities Disclaimer

  1. Dividend growth is not guaranteed, nor are companies in which you invest obliged to pay dividends;
  2. Companies may go bankrupt rendering the original investment valueless;
  3. Equity markets may decline in value;
  4. Corporate earnings and financial markets may be volatile;
  5. If there is no recognised market for equities, then these may be difficult to sell and accurate information about their value may be hard to obtain;
  6. Smaller company investments may be difficult to sell if there is little liquidity in the market for such equities and there may be substantial differences between the buying price and the selling price;
  7. Equities on overseas markets may involve different risks to equities issued in Singapore;
  8. With regards to investments in overseas companies, foreign exchange rates may move in an unfavourable direction affecting adversely the valuation of investments in base currency terms.

Foreign Currency

  1. Foreign currency investments or deposits are subject to inherent exchange rate fluctuation that may provide opportunities and risks. Consequently, exchange rate fluctuations may affect the value of your foreign currency investments or deposits.
  2. Earning on foreign currency investments or deposits may change depending on the exchange rates prevalent at the time of their maturity if you choose to convert.
  3. Exchange controls may apply to certain foreign currencies from time to time.
  4. Any pre-termination costs will be taken and deducted from your deposit directly and without notice.

Dual Currency Returns

  1. By buying Dual Currency Returns, you are giving us the right to repay you at a future date in a different currency from the currency in which you made your original investment, even if you would prefer not to be paid in this currency at that time. Dual Currency Returns are affected by foreign exchange rates, which may affect how much you get back from your investment. You may receive less than you originally invested.
  2. Foreign exchange control restrictions may apply to the foreign currencies linked to your Dual Currency Returns. As a result, we may repay your investment and interest in a different currency. You may receive less than you originally invested when the amount of this different currency is converted back to the base currency (the currency you originally invested). You may be able to get information on foreign exchange control restrictions, if any, for each foreign currency offered in relation to Dual Currency Returns, from the relevant monetary, regulatory or other governmental authorities for that currency.
  3. We will not end Dual Currency Returns before the maturity date (the date they are due to end). You may, however, withdraw the amount you originally invested before the maturity date. If you do this, please remember that you will have to pay any charges that apply which are calculated based on the amount of the time remaining before maturity date, as well as current market conditions relating to strike prices, foreign exchange rates and changes in the underlying foreign exchange pair. These charges may mean that you get back much less than you originally invested. Please feel free to approach your relationship manager for details of the procedures and charges that apply if you withdraw your Dual Currency Returns investment before the maturity date.
  4. Dual Currency Returns are not insured deposits for the purposes of the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011.

Collective Investment Schemes

  1. A copy of the prospectus of each fund is available and may be obtained from the fund manager or any of its approved distributors. Potential investors should read the prospectus for details on the relevant fund before deciding whether to subscribe for, or purchase units in the fund.
  2. The value of the units in the funds and the income accruing to the units, if any, may fall or rise. Please refer to the prospectus of the relevant fund for the name of the fund manager and the investment objectives of the fund.
  3. Investment involves risks. Past performance figures do not reflect future performance.
  4. Any reference to a company, financial product or asset class is used for illustrative purposes and does not represent our recommendation in any way.
  5. For funds that are listed on an approved exchange, investors cannot redeem their units of those funds with the manager, or may only redeem units with the manager under certain specified conditions. The listing of the units of those funds on any approved exchange does not guarantee a liquid market for the units.
  6. Any indicative distribution rate may not be achieved and is not an indication, forecast, or projection of the future performance of the Fund.

Cross-Border Marketing Disclaimers

OCBC Bank's cross border marketing disclaimers relevant for your country of residence.

Any opinions or views of third parties expressed in this document are those of the third parties identified, and do not represent views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).

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