Singapore's fund managers flag trade tensions and US tightening as key concerns

Fund managers are embracing multiasset strategies in response to dismal conditions.

Rising political risks and further increases of US interest rates were identified as top concerns amongst fund managers in 2018, according to the Investment Management Association of Singapore (IMAS) latest annual investment managers' outlook survey.

The survey which analysed the responses of over 55 investment managers in Singapore found that over a third of the respondents cited risk of business disruptions from new technologies as one of the biggest threats to Singapore’s industry.

Also read: M&A activity fell 30.7% to $90.86b in 2018

“With increasing concerns over global political pressures and uncertainty in the US, multi-asset strategies (53.57%) are expected to be the top strategy of choice by fund managers in 2019, followed by ESG-focused (39.29%) and absolute return strategies (35.71%),” IMAS said in a statement.

The rise of financial technology within the fund distribution channels may be one of the top future drivers of investment growth within the next three years, according to the fund managers surveyed. This was followed by improving investment performance and assets under management, and seeking demand for lower cost products, the report highlighted.

Approximately 60% of the fund managers surveyed were found to also anticipate rising business and regulatory compliance costs to have the most impact on the firms in the next 12 months.

Also read: Singapore IPO proceeds plunge to $730m in 2018

“The more everyday concerns have given way to worries over the state of global politics such as the rise of populism, income inequality and even war,” IMAS’ chairman Nicholas Hadow said in a statement. “It is no surprise, given the broad uncertainty, that we are now seeing more interest in multi-asset strategies from investors seeking diversification in their investment portfolios.

Amidst an uncertain global backdrop, Hadow added that Singapore will continue to offer a stable and resilient investment management centre for investors, particularly in the realm of technology.

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