H1 2022 Tactical Calls Review
Open Calls
Equities have suffered broad declines after major global central banks embarked on monetary tightening that led to reduced liquidity. The performance of our high-conviction call on US Financials was negative but fared slightly better than the broad MSCI World Index. We also initiated a call on Japan equities as valuations are attractive. However, investors will need to extend their holding period to realise the potential of Japan equities amid the current macroeconomic backdrop.
Among our Megatrend ideas, Healthcare, the US market and Sustainability were our better-performing themes. Traditionally a defensive sector, Healthcare held up better in H1 2022. In contrast, AI and Innovation and Chinese equities were the worst performers due to the diminishing appeal of growth-oriented Tech equities due to rising interest rates. Meanwhile, the tightening of regulatory measures and disruption of economic activities due to China’s COVID lockdowns had a severe negative impact on the Chinese equity markets.
Closed Calls
We closed our high conviction calls on US Consumer Discretionary and European equities in February 2022 and May 2022, respectively, due to higher inflationary pressures which have a disruptive impact on the recovery in discretionary spending, especially amid ongoing uncertainties stemming from the conflict in Ukraine.
Data from January 2022 to 31 May 2022
Data from January 2022 to 31 May 2022
*Performance of Allianz Global Artificial Intelligence Fund is used as the proxy for artificial intelligence and innovation equities due to the unavailability of a suitable benchmark index.
^Source: Bloomberg. All percentages shown are expressed in their respective local currency terms, and reflect the total returns from call start date to 31 May 2022 or call end date, whichever is earlier.
+Source: Bloomberg. All percentages shown are expressed in their respective local currency terms, and reflect the total returns from 1 January or call start date, whichever is later, to 31 May 2022.
