Building Your Portfolio

UOB’s Risk-First Approach is the foundation for your wealth planning journey. The principle is to protect your wealth with adequate cash buffers and appropriate insurance solutions. When this is done, build your wealth with a resilient portfolio of Core allocation solutions to meet long-term financial needs, before enhancing wealth with Tactical allocation solutions to capture market opportunities when they arise.

Core allocation solutions help you progress towards your long-term financial goals and can weather different market cycles. Dollar-cost averaging can be a good way to build up your Core allocation. After that, you can consider Tactical allocation solutions that are focused on capturing targeted short-term opportunities with the aim of capital growth. Importantly, diversify your investment portfolio to weather all market conditions.

Many of you have invested in a defensive portfolio with a focus on bonds over the last year. This will be rewarding as the global economy slows, as bonds will do well with central banks nearing the end of their rate hike cycle. At the same time, consider multi-asset strategies for both diversification and income.

If you have low exposure to bonds, you still have a chance to lock in high yields before they fall. Fixed deposits and money market funds provide good short-term income, while bond funds and investment grade bonds can lock in high yields for a longer period. For those concerned about a possible recession or geopolitical risk, you can consider increasing your bond allocation.

If you are willing and able to take risk, consider Tactical allocation Top Ideas such as global healthcare as well as Asia ex-Japan and ASEAN. You can find out more about these ideas below.

Another Tactical allocation strategy is to accumulate quality growth stocks, including those that pay dividends, on dips when they are cheaper. Now is the time to build an additional source of cashflow from strong companies that pay dividends so that you continue to enjoy income from your portfolio when yields from cash and bonds fall.

Core Allocation

Multi-asset strategies

Multi-asset strategies are an important part of the Core allocation, as they help you diversify and lower the risk of your portfolio, while potentially offering regular income in the form of monthly dividends. A diversified approach delivers consistent returns over time with lower volatility.

Accumulate multi-asset strategies on dips to capture opportunities across different market cycles and asset classes such as stocks, bonds and alternatives.

Investment grade bonds

Investment grade bonds are expected to perform well this year as economic growth and inflation slows and central banks eventually cut interest rates. Besides income from current high yields, potential capital appreciation can boost total returns from bonds.

Focus on short to medium-term duration bonds at the start of the year, before progressively turning to longer duration bonds as the year progresses when debt issuance concerns ease.

Tactical Allocation

For VTAR framework, refer to our VTAR Methodology.

Top Ideas

Top Ideas are investment opportunities, with a 24-month outlook, that the UOB Personal Financial Services Investment Committee identifies through a rigorous process of research and deliberation using our VTAR framework. This framework provides a holistic view of financial markets and identifies investment opportunities across asset classes, sectors, geographical regions and time periods.

Global healthcare

Global healthcare offers both short and long-term investment opportunities.

The healthcare sector may be more resilient than the broader market in a growth slowdown, due to its defensive nature. Prospects of positive earnings growth may boost the performance of the healthcare sector in 2024.

Long-term drivers include promising developments in diagnostic and life science services, healthcare technology and equipment. Medical innovation and development in anti-obesity drugs could also see exponential growth, estimated to have a total addressable market of USD77 billion in revenue by 2024.

Asia ex-Japan/ASEAN

Asia’s economic activity is likely to do better than that of the US and Europe. History shows that when Asia’s economic growth beats that of its developed market peers, it also means better performance for Asian stocks. Furthermore, Asia offers attractive stock dividends which will help the region’s stock market stand out this year.

For ASEAN, household consumption is expected to be resilient while the export outlook is stabilising. Stock valuations are also attractive.

Other Tactical allocation solutions

Accumulate quality growth stocks, including those that pay dividends, on dips when they are cheaper.

Quality growth stocks are expected to do better in a slowing growth environment given their steady cash flow and strong balance sheets.

Now is the time to build an additional source of cashflow from strong companies that pay dividends so that you continue to enjoy income from your portfolio when yields from cash and bonds fall. Quality dividend-paying stocks can help you achieve this and Asia ex-Japan offers attractive stock dividends now.

Additional Resources

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The information contained in this publication is given on a general basis without obligation and is strictly for information purposes only. This publication is not intended to be, and should not be regarded as, an offer, recommendation, solicitation or advice to buy or sell any investment or insurance product and shall not be transmitted, disclosed, copied or relied upon by any person for whatever purpose. Any description of investment or insurance products, if any, is qualified in its entirety by the terms and conditions of the investment or insurance product and if applicable, the prospectus or constituting document of the investment or insurance product. Nothing in this publication constitutes accounting, legal, regulatory, tax, financial or other advice. If in doubt, you should consult your own professional advisers about issues discussed herein.

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Managing Editor
  • Winston Lim, CFA
    Singapore and Regional Head,
    Deposits and Wealth Management
    Personal Financial Services
Editorial Team
  • Abel Lim
    Singapore Head,
    Wealth Management
    Advisory and Strategy
  • Michele Fong
    Head, Wealth Advisory and Communications
  • Tan Jian Hui
    Investment Strategist,
    Investment Strategy and Communications
  • Low Xian Li
    Investment Strategist,
    Investment Strategy and Communications
  • Zack Tang
    Investment Strategist,
    Investment Strategy and Communications
UOB Personal Financial Services Investment Committee
  • Singapore
    • Abel Lim
    • Ernest Low
    • Michele Fong
    • Tan Jian Hui
    • Low Xian Li
    • Zack Tang
    • Jonathan Conley
    • Alexandre Thoniel, CAIA
    • Chen Xuan Wei, CFA
    • Chia Hong Wei
    • Daphne Chan
    • Marcus Lee, CFTe, CMT
    • Ivan Hu
    • Chloe Kwan
  • Malaysia
    • Ryan Tan
    • Mow Wei Sern
  • Thailand
    • Suwiwan Hoysakul
    • Boonnisaed Thanyaworaanan
  • China
    • Huang Li Li
  • Indonesia
    • Diendy