MR MONEY MAKER: Where to put your savings as east meets west this year
There is a theme which I have followed for some years and it is showing no signs of stopping. It is the rise of the oriental consumer.
For we occidentals, the Far East is often seen as a luxurious holiday destination providing skinflints like me with the opportunity to buy excellent fake handbags.
These usually look impressive until examined by one’s partner, who smells a rat.
Investing opportunity: The balance of global wealth has already started to change
Why Does It Matter?
The pandemic, as we know, emanated from China and spread rapidly throughout the region. However, having had previous experience of similar outbreaks such as SARS and MERS, the organisational efficiency of many eastern states was a wonder to watch.
This meant that the disciplines of mask wearing and social control were far more acceptable and understandable to the local populations, in stark contrast to the cynical attitudes by many in the West who subsequently paid the price in being affected more heavily.
What this meant was that although all the economies in the ASEAN region were affected, many took the discipline in their stride.
Both global trade and their wider economies took a hit, but domestic consumer demand was not bashed in the same way, although those involved in the tourism industry were devastated.
What Should I Do?
There are two things to note here. First, the growing strength and wealth of this region’s middle class (including some of my family, I must disclose), and second, that with the line of vaccines seeming to be growing, tourism will return and those empty sites will fill up.
The balance of global wealth has already started to change, and not just because of China.
Singapore has been growing as a very effective financial hub for several decades. Now, with increasing compliance controls in the US and UK, greater attention into what goes into the vaults of Switzerland, and the Chinese wishing to move funds offshore and beyond Hong Kong, this city state is seeing far greater inflows of investment.
For the confident, although this is not to do with making money but rather saving on holiday costs, booking a trip now could prove very beneficial.
Picking stocks in Asia is a mug’s game at this distance. You either find a good fund manager or a good value ETF to track the indices you want.
For an active manager I like Stewart (no relation) Investors’ Asia Pacific Leaders Sustainability fund for proven performance and consistency.
However for a greater spread of risk and less cost, the Global X FTSE South East Asia ETF gives good exposure to the leading ASEAN nations.
Justin Urquhart Stewart co-founded fund manager 7IM and is chairman of investment platform Regionally