The economic impact of the COVID-19 pandemic doesn’t entirely prove a downward trend for investors who wish to diversify their portfolios on a global scale. There are still opportunities for investing, such as in global “emerging themes,” to future-proof one’s portfolio.
This is according to Allen Martin Dee, Head of Investment Solutions at BPI Asset Management and Trust Corporation (BPI AMTC) in a recently held BPI AMTC webinar “The Bull, The Bear and The Virus – The Anatomy of Resilient Investment Plans.”
“The COVID-19 pandemic will change the way consumers behave, and we’re already seeing it now. This is the perfect time to future proof your portfolio by investing in emerging themes such as healthcare, technology, innovation, and sustainability,” explained Dee.
“These themes are going to do very well in the coming years and we encourage you to diversify your portfolio so that you can take advantage of this opportunity,” he added.
Diversification is important because every year, there are winners and losers in the market, Dee said. “There was a time when the S&P 500, the main US index of stocks, was the best performing in the past 12 years. But there are also times when Emerging Markets did better.”
He continued, “there were times when gold did better, and a year when cash was the best performing asset class. It’s very difficult to pick winners, and there is a different winner almost every single year. But if you have a balanced portfolio, then you can take advantage of whoever wins in that year.”
BPI AMTC also noticed that there is a common misconception on investing in global assets, as some investors think that this is riskier. But this is not always the case, said Dee.
“The fact is, over a ten-year period, the numbers show that global equities gave better returns with less volatility compared to local equities. While the Philippines continued to grow at a rapid pace and obtained its investment grade credit rating along the way, other parts of the world are advancing more significantly. Dramatic progress in the varied fields of technology and healthcare spurs new innovative ideas, giving investors a glimpse of the future and a chance to participate in potentially more profitable ventures. A balance of domestic and offshore investments keeps your portfolio diversified and resilient over the long term.”
Investing in the time of COVID-19
The webinar also featured Bank of the Philippine Islands and BPI AMTC Independent Director Ignacio Bunye who shared his experience as a seasoned investor.
Bunye’s investment journey with BPI AMTC, which spans over two decades, has weathered several market declines including the 2008 Global Financial Crisis.
To navigate investments amidst COVID-19, he shared some insights on how to build one’s savings and how to effectively invest in the long term.
“As the saying goes, every threat has a corresponding opportunity. Under these extraordinary times, it is prudent for you to set aside a cash buffer to meet your basic expenses for a certain period of time and for any unforeseen circumstances. Having done this, just stay calm and stay invested. Keep your eyes wide open for the evolving risks while simultaneously looking out for investment opportunities.”
Mr Bunye also emphasized the importance of working with fund managers who are better equipped to weather the turbulence in the financial markets brought by crises such as COVID-19.
“A doctor does not operate on himself but gets another doctor to do so. But the more practical reason is the lack of time I can devote to managing the investment. It is almost impossible to have an ordinary day job and still be as in touch with the financial markets as much as a fund manager can. Because of hands-on, day-to-day interaction, a fund manager is also better positioned to make timely investment decisions.”
The webinar was attended by over 600 clients and bank frontliners.
BPI AMTC holds regular webinars on the financial markets, featuring its diverse pool of investment experts in the Philippines, and foreign fund managers from Hong Kong, and Singapore.
To learn more about these webinars, email bpiamtcbrand@bpi.com.ph.
