Multi-Asset Perspective – Apr 2024


There are signs of a gradual economic recovery in China, including improving PMI numbers and better-than-expected GDP. Investor sentiment has bottomed and improved, with some inflows returning to the market.

Momentum has also continued to improve in Asia, given the better economic environment in China, the US, and Europe. The region’s high-tech sector also continues to see an upside in earnings, given the strong demand for AI and other emerging technologies.

However, the higher for longer interest rate cycle in the US and geopolitical risks will continue to be major headwinds to the overall market, including Asia and emerging markets.

Key indicesMarch 2024 performanceYTD performance
MSCI AC Asia ex-Japan Index (in USD)2.54%2.38%
MSCI China Index (in USD)0.94%-2.19%
CSI 300 Index (in CNY)0.61%3.10%
Hang Seng Index (in HKD)0.64%-2.53%
Taiwan Stock Exchange Index (in TWD)7.23%13.50%
MSCI Taiwan Index (USD)7.89%12.43%
JPM ACI China Total Return Index (in USD)0.78%1.64%
JPM Asia Credit Total Return Index (in USD)1.06%1.42%

Source: J.P. Morgan, MSCI, Morningstar, Data as of 31 March 2024

China/Hong Kong equities

  • The market has adjusted its rate cut expectations to align with the Fed’s dot plot, leaning even more to the hawkish side. Treasury yields will likely stay around the current levels and are unlikely to move down. Going into Q2, the US market will refocus on economic data to find cues on the economy’s strength and a potential resurgence of inflation. Some correction is expected from the previous “Goldilocks” assumptions.
  • In China, there are signs of a gradual economic recovery from the improving PMI numbers. Market sentiment has bottomed and improved, with gradual inflows returning to the market. Exports have also improved, given the stronger global macroeconomic backdrop. On the other hand, the property market continued to be weak, although there are now some signs of bottoming.

China A-shares

  • Foreign inflows have started to come back with the bottoming of the economy. Company earnings are also bottoming, with the worst to be seen in Q1 and Q2. Many companies have also increased their dividend payouts to improve ROE and restore investor confidence.

Asia ex-Japan equities

  • Many Asian countries have held interest rates steady and await the Fed to start the cut before they move. Banks in the region, particularly Southeast Asia, generally have lower NIM but enjoy healthy loan growth as their domestic economies remain strong.
  • Momentum has improved, given the better economic environment in China, the US, and Europe.  Along with the correction in the US equity market, the high-growth tech sector in Taiwan also takes a setback. However, there is still an upside in earnings, given the strong AI demand.

Emerging market ex-Asia equities

  • The strong USD capped the upside of emerging market equities, although the higher commodity prices support commodity-heavy countries in emerging markets. The recent heightened geopolitical tension in the Middle East is also a risk.

Japanese equities

  • Bank of Japan finally stepped out from the negative interest rate policy and removed the yield curve control, moving the benchmark interest rate to 0-0.1%. However, the BOJ continues to buy the same amount of JGBs per month, keeping the monetary policy easy. The market expects the BOJ will move very slowly, with one more hike not until October. The spring wage negotiations went stronger than expected. Given the structural problem in the aging demographics and full employment in the working population, we believe wage growth and inflation have become structural for the first time in the past 30 years. The BOJ will likely be pressured to normalize interest rates faster.
  • Momentum is fading, and along with the US equity market correction, there will be some correction in Japan. However, the weak JPY continues to be a tailwind to company earnings.

Asia investment grade bonds

  • Asia investment grade bonds continued to attract inflows due to their attractive yield levels and negative net issuance. Credit spreads remain stable at already tight levels. US Treasury yields are likely to stay around the current high levels, given market worries over the more hawkish Fed.  Asian investment grade bonds will remain stable, mainly for carry.

Asia high yield bonds

  • Activities in Asian high yield bonds continue to be active, and spreads continue to narrow. There are signs of some high yield issuers returning to the market after a very long pause, which is a healthy development for the asset class.
  • However, the market is chasing a few names, causing a narrowing of breadth in the market.

Emerging market debt

  • Spreads have become even tighter while demand remains strong. Higher Treasury yields and the strong USD put some pressure on the market’s momentum.


  • Gold prices again broke their historical high, given the current heightened tension in the Middle East. Another reason is Bitcoin breaking an all-time high, which has some effect on gold.
  • However, as the surge is very rapid, similar to the previous rounds, some correction is imminent. Nevertheless, gold remains a good geopolitical hedge in the medium to long term.


  • A multi-asset strategy offers lower volatility compared to traditional single-asset or balanced portfolios. However, the correlation between risk assets, such as equities, credits, and commodities, has recently increased dramatically. In an uncertain environment with low yields, income becomes an essential source of return for investors.

Know more about Value Partners Asian Income Fund

The views expressed are the views of Value Partners Hong Kong Limited only and are subject to change based on market and other conditions. The information provided does not constitute investment advice and it should not be relied on as such. All materials have been obtained from sources believed to be reliable as of the date of presentation, but their accuracy is not guaranteed. This material contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Investors should note that investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Investors should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you.

This article has not been reviewed by the Securities and Futures Commission of Hong Kong. Issuer: Value Partners Hong Kong Limited.