A local fund manager urges Filipinos to diversify their investment portfolio amid the changing global economic landscape, as headwinds such as the impact the coronavirus disease of 2019 (Covid-19) is seen to affect certain sectors.
Mario T. Miranda, Rizal Commercial Banking Corp. (RCBC) Trust and Investments head, recommends that Filipinos branch out in terms of handling their investment portfolios with a bias for strong defensive investment positioning due to heightened local and global risks.
He cautioned investors on the risks brought about by the effect of Covid-19, wherein the slowdown in tourism and trade, among others, may dampen economic growth. Despite stringent measures being taken to prevent the spread of the virus, an increase in terms of risk aversion in global and local financial markets is seen as a result of this.
“We see interest rates trading sideways with a slight downward bias due to risk off sentiments and expect the equity market to trade higher following the rebounding economic growth forecast,” Miranda was quoted in a statement as saying.
For conservative investors, he suggests to make investments in money market funds, while aggressive investors can take advantage of volatilities by parking their funds through equities and fixed income. Miranda also pointed out that another alternative would be the Philippine peso or the US dollar money market Unit Investment Trust Funds (UITFs), which have longer durations and potentially higher returns.
“We suggest diversifying and exploring foreign investments providing good returns with investment-grade rating to protect themselves from wider volatility either through opening Investment Management Account accounts or participating in globally invested funds,” he added.
In the local landscape, financial institutions still perceive the growth of the Philippine economy to remain on the positive side despite the global headwinds.
Both the World Bank and the Asian
Development Bank expressed optimism in line with the country’s gross domestic
product growth forecast of 6.1 percent and 6.2 percent respectively, coming
from the 5.9 percent print
reported in 2019.
RCBC Chief Economist Michael L. Ricafort explained that the positive outlook on the local economy can be attributed to faster government spending, resilient growth in consumer spending, and some pick up in capital formation with the recent gain in loan growth.