HSBC advocates diversified global investment portfolio with emphasis on ASEAN and Indian assets

James Cheo, chief investment officer for Southeast Asia and India at HSBC Global Private Banking and Wealth, discussed evolving investment opportunities in ASEAN and India. He underscored the importance of diversified portfolios for Asia’s investors amidst changing global dynamics. He emphasised investment in high-quality fixed income and bonds, highlighting their potential for capital appreciation in a declining interest rate environment.  

Cheo pointed out the potential in these markets, especially for investors whose portfolios lack diversification. In Southeast Asia and India, traditionally, high and ultra-high-net-worth individuals have predominantly invested in their core businesses and local markets, including real estate, with which they are familiar. 

He stressed the importance of exploring a wider range of investment solutions across public and private markets, geographies, and durations, including global equities, and private debts and equities. These have shown resilience amid rising inflation and market uncertainties. He also emphasised that a truly diversified portfolio should consist of assets with minimal correlation, providing stability and protection against market volatility in turbulent times. 

Highlighting the growing popularity of family offices in Asia, Cheo underscored the shift from wealth creation to wealth preservation. In this context, professional and diversified asset management becomes paramount, with an emphasis on family governance, philanthropy, and succession planning to safeguard and grow intergenerational wealth. He shared that HSBC’s proprietary solutions for private banking clients use advanced data analytics to construct diversified portfolios and conduct stress tests under various risk scenarios to enhance resilience. 

Cheo spotlighted the dynamic markets of ASEAN and India as the “AI”, or ASEAN-India strategy, citing their demographic advantages, expanding middle class, and integral role in global supply chains. 

While acknowledging China’s role as a key economic engine for the region, he noted the downturn of its property market and maintains a neutral stance towards the Chinese market with some opportunities related to the service consumption sector.

Cheo sees clear growth opportunities in ASEAN and India due to their strong economic performance and demographics. 

He believes that digital transformation and sustainability are key themes that will shape the future of investment. These factors will not only dictate market trends but also reflect the evolving demands of investors for transparency and alignment with personal values. 

Greater digital adoption will reshape not only consumer behaviour but also the region’s economic structures. Green transformation, particularly in renewable energy and electric vehicles, presents new investment avenues and should be considered as part of a diversified investment strategy that captures the region’s long-term growth potential.