by Jennifer Hill from interactive investor, 8th October 2024:
Making the case for the bulls are anticipated interest rate cuts, an economy that appears to be on a stable footing and low unemployment.
Making the case for the bears are relatively high stock valuations, looming elections and the chance that recession may not be avoided.
With plenty to be positive about and numerous risks on the horizon, it makes sense to have a foot in both camps – and it’s a strategy that has merit throughout the market cycle..
Below, wealth managers and analysts suggest nine bull and bear pairs for exposure to different regions..
James Carthew, head of investment companies at QuotedData, suggests an Asia-Pacific pair: the riskier VietNam Holding and the more cautious abrdn Asian Income Fund
He points to the “impressive” 10-year track record of the Vietnamese equity trust, having “delivered returns that are a multiple of local and regional indices”, and the exposure it offers to one of the fastest-growing economies in Asia.
“Its success reflects a thriving manufacturing sector. Its domestic economy is being transformed too as its cities grow, consumers have more disposable income, and companies embrace modern technology,” says Carthew.
Meanwhile, abrdn Asian Income pays a covered dividend from a portfolio of quality companies with strong balance sheets and sustainable earnings.
Carthew adds: “The requirement to pay a dividend gives the portfolio a value tilt, but the managers favour sectors that offer structural growth. Fortunately, as they pay dividends, it can still have a reasonable allocation to Asia’s technology giants such as Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics Co Ltd.
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