Hong Kong/Singapore – Citi Private Bank (CPB) today presented its 2021 Outlook: The New Economic Cycle; Investing for a Post-COVID World to clients in Asia Pacific. The current edition of the twice-yearly report says 2021 will mark the beginning of a new economic cycle, one that has more powerful tailwinds than investors expect, and is advising clients to be fully invested.
"The investment opportunities in this new economic cycle will reflect many new realities, shaped by the impact of technology upon our lives during this pandemic, as well as upon the values that we share," said Ken Peng, Asia Pacific Head of Investment Strategy for Citi Private Bank. "Our optimism this year is buoyed by strong financial institutions, high household savings, and growing confidence levels among businesses and consumers alike. We're also seeing increased investor optimism due to low global interest rates that will enable a full economic recovery."
The report cites a confluence of four factors in calling for investor action:
1. The global economy is expected to recover more quickly from COVID than after a more typical large downturn. Employment and spending are also expected to rebound faster;
2. Innovation will accelerate, as will the adoption of technology. The impact of this next industrial revolution will generate great value for investors;
3. A period of structurally low interest rates will diminish the value of cash and many fixed income investments. Earning negative real returns is harmful to portfolios;
4. The mispricing of securities caused by COVID will be reversed.
Citi Private Bank recommends that clients not hold excess cash and wait for a 'better entry point'. Instead, they should be fully allocated and invested after deciding on how much cash they will need for the next five years.
Last year also proved the staying power of CPB's "Unstoppable Trends", especially digitalization, the rise of Asia, the greening of the world, and longevity. The exposure of portfolios to these trends should be increased as a proportion of overall equity ownership. CPB also recommends clients modify the ratio of equity to debt to reflect the interest rate environment and the numerous undervalued opportunities in global markets. In contrast, fixed income portfolios should only reflect the best yield opportunities across the globe.
The full report, a summary version, and other materials can be accessed via the Citi Private Bank website.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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Citi Private Bank
Citi Private Bank is dedicated to serving worldly and wealthy individuals and families, providing customized private banking across borders. With around $500 billion in total client business, the franchise serves clients across 50 cities in over 100 countries. Citi Private Bank helps clients grow and preserve wealth, finance assets, make cash work harder, safeguard assets, preserve legacies, and serve family and family business needs. The firm offers clients products and services covering capital markets, managed investments, portfolio management, trust and estate planning, investment finance, banking and aircraft finance, art advisory and finance, and sports finance.
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