Citibank forecasts global GDP growth to decelerate to 3.8% this year as the world economy enters a slowdown amid growing inflation and imminent interest rate hikes, though it remains optimistic about the growth of cyclical industries with long-term growth.
Citibank analysts recommend investors focus on long-term leaders that yield positive and consistent returns such as IT, healthcare and consumer staples, high-yield bonds and debt in emerging markets in Asia. Analysts urge a focus on investment trends that have consistently been on the rise.
They estimate global equities will yield 7-8% returns in 2022 and expect global fixed income to offer 1-0%. Investors should focus on sustainable income creation, private markets and using capital markets to enhance yield from cash or fixed income, said the analysts.
Ken Peng, head of investment strategy at Citi Global Wealth for Asia-Pacific, said the global economy is unlikely to bounce back to where it was pre-Covid, but he foresees no sudden economic disruption, even with the Omicron variant still spreading across the globe.
As many countries tighten their monetary policies, global real GDP growth is expected to decelerate to 3.8%, and US and China market growth is projected at 3.5% and 4.5%.
The investment world still faces many challenges, but Citi analysts are optimistic about cyclical industries that have benefitted from the changing market environment. Analysts recommend investment diversification with a focus on specific industries, including healthcare, energy, technology and digital disruption.
Adopting a multi-asset strategy to tackle fluctuations is also recommended, especially fixed-income investments in emerging Asian markets, high-yield bonds and US Treasury instruments focused on delivering sustainable returns, according to the analysts.
They suggested investors keep an eye on the growing tension between the US and China as well as the US and Russia to diversify risks and optimise their portfolio in the long term.
Don Charnsupharindr, retail banking head at Citi Thailand, said it plans to offer new funds to clients this year.
"Our assets under management last year grew across the Citigold and Citi Priority segments, which offer more than 200 funds in collaboration with five domestic asset managers and 12 global asset managers that carry diverse products," said Mr Don.
