So far, in the calendar year 2022, markets have been extremely volatile. This volatility has followed a period of a strong bull rally after covid hit the global markets in March of 2020. This current period of uncertainty and flight away from risk assets has been triggered by emergence of inflation, which was not a major consideration in the past few decades. Consequently, Central Banks around the world have become increasingly hawkish as they try and tackle rising inflation by increasing interest rates. Moreover, this period of monetary tightening coupled with uncertainty revolving around the Ukraine-Russia War has also caused fears among investors that the global economy is heading towards a recession.

In this extremely challenging and rapidly changing environment, investment portfolio construction is the key to preserve capital and steadily grow it, so that member interests can be protected.

It is always important to look at superannuation investments with a medium to long term investment horizon in mind.  There will always be periods of short-term volatility. At Crescent Wealth, we manage portfolios where we not only consider short term factors, but we also keep in mind the more important long-term investment objectives.  We construct our portfolios, which entail diversification across asset classes, so that they are not significantly impacted by short-term headwinds but at the same time benefit from the long-term appreciation of global financial markets.

 

In the current Macro environment, where interest rates and inflation are rising, we remain very conscious of our asset allocation decisions. We consider factors like the sensitivity to changes in interest rates and inflation at both the asset class level and at the more detailed industry level.  Note that we have maintained our bias towards Value stocks and real tangible assets to be more defensive in the current bear market. That said, we are constantly evaluating potential tactical shifts in the portfolio to prepare for the ever-changing global macro environment.

In the end, I would like to re-iterate that protecting our members’ interests is the main priority at Crescent Wealth. All portfolio investment decisions are taken after much research, deliberation and consideration of macro and micro factors.

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Head of Product & Operations

Mas Johan Harris joined Crescent Wealth in October 2013 as its Head of Product & Operations. He has over 20 years’ experience in Funds Management working both in Australia and internationally. Starting his career with AMP in Sydney, he then built upon this with experience working with large global managers like Royal & Sun Alliance and Barclays Capital in London. Before joining Crescent Wealth, he spent an extended period in Malaysia with KAF Investment Bank helping to build up their Funds Management business.

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