Elections in the world's major economies may increase short-term market volatility

Advisers achieve up to 11% growth in a single month at In+ Simulation Investment Game

Heng An Standard Life (Asia) Limited ("HASL Asia" or “the Company") has released its Q3 2024 economic outlook, in which it has cut the number of expected US interest rate cuts in 2024 from three to one in light of the unexpectedly strong US economic data and the Federal Reserve’s hawkish stance. But if US economic and employment data weaken in the 2H of the year, the pace of overall monetary policy shift may accelerate. Also, as 2024 is a "super election year", elections in the world's major economies may increase market volatility in the short term.

Harriet Zhang, Chief Investment Officer of HASL Asia, said, "The focus of the global economy in the Q3 this year is the correction of the recession predictions and the delay in an expected interest rate cut. The Federal Reserve has revised its inflation forecast for 2024 upward, with the core Personal Consumption Expenditure (PCE) forecast to rise from 2.6% in March to 2.8% in June, and the unemployment rate remaining at the 4% level forecast in March. This forecast is consistent with the recently disclosed actual operating data, supporting the expected delay in an interest rate cut. However, if the economic and employment data weaken in the second half, i.e., the Federal Reserve's economic forecast is proven to be too optimistic, the pace of the overall monetary policy shift may accelerate. In China, the manufacturing PMI fell into the contraction range in May after two months of growth, so that the recent recovery driven by the manufacturing sector remains to be seen.”

In terms of asset allocation, so far this year, the valuations of US and Hong Kong stocks have declined because of the downward revision of earnings growth expectations and the high level of US bond yields. The valuation of European equities has declined due to the rise in European bond yields. In light of the downward revision of regional growth expectations, the bond valuations look slightly better than equities for investors, with the renminbi as the base currency. In summary, the Company maintains a neutral-optimistic rating on bonds, as well as a neutral rating on the US and Chinese stock markets.

Announcement of In+ Simulation Investment Game results of financial advisers

To further enrich the investment experience of customers, HASL Asia recently launched the innovative online investment portfolio platform In+, which allows users to manage the investment choices of their investment-linked assurance scheme (ILAS). In May, the Company invited financial advisers to join the In+ Investment Simulation Game, enabling them to create the best ILAS investment portfolios through In+ from the Company's 300-plus investment options.

The results of the game are now out. 80% of investment portfolios recorded positive returns. The top-performing portfolios grew up to 11% in June, concentrating on technology and India. The 10 winners will each receive HK$2,500 vouchers as a token of appreciation. We are honoured that 90% of the surveyed participants said that In+ could help improve their ILAS portfolio management experience.

Zhang said: "Adhering to our brand proposition of ‘Get more from life’, we are committed to empowering customer experience with technology. Financial advisers actively participated in the In+ Simulated Investment Game, increasing our confidence in promoting In+ to the customer level. As the insurer* that provides the most investment options in Hong Kong’s ILAS market, HASL Asia is also the first* to offer ETF investment options^#, providing customers with more than 300 investment choices from 25 renowned fund houses globally. We will continue to collaborate with more fund houses to expand ILAS investment choices across diverse themes and types.”

_{*Compared to the data from existing insurance companies that offer ILAS products in the Hong Kong market, as of 31 July 2024.
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