Simon Smiles is the Chief Investment Officer UHNW, UBS based in Zurich. We caught up with him yesterday and asked if he could outline a brief strategy to counter act inflation specifically for Asian based clients. Is it gold, cash, stocks or real estate?
For many investors the longer they wait the more confusing it is to make a firm choice. Smiles who spent many years with UBS in Asia knows the region well, his take on our question was.
"Low or no yields on most cash holdings represent an almost guaranteed destruction of real purchasing power. Unfortunately, there are only three ways for investors to avoid this and each involves taking on more risk. Namely, duration, credit, and/or FX risk.
In Asia, we are recommending clients invest in Indonesian, Taiwanese and Philippine equities, which offer exposure to the expected acceleration in global growth this year as well as decent running dividend yields. We also think Asian High Yield credit will perform well in the coming six months. And the Indian Rupee is a currency which earns investors positive real yields."
