Global equities focusing on healthcare and e-commerce are poised to generate handsome returns compared with traditional asset allocations, which should underperform during the global economic slowdown, says Tisco Bank.
"Equity is still attractive during a low interest rate environment, where the US Federal Reserve should maintain its benchmark interest rate at 0-0.25% until at least 2022," said Nattakrit Laotaweesap, head of wealth advisory at Tisco Bank.
"We suggest a selection of strategic funds that invest in global megatrends related to people's new way of life, such as healthcare, technology and e-commerce. This can generate profit even during a recession."
For high-risk investors, portfolios should include equity focused on global megatrends, making up to 70% of their total wealth, with gold making up 5-10%, said Mr Nattakrit.
Asset allocation in conventional sectors has not generated sufficient returns as global stock markets have been ravaged by the looming global economic recession, he said.
The global economy has slowed down since 2018 and is entering a recession, with a 4.5% GDP contraction expected this year, said Mr Nattakrit.
The pandemic, the upcoming US presidential election and the US-China geopolitical tensions are the main downside risks fuelling the global economic recession, he said.
The Fed's monetary stimulus programme worth trillions of dollars and an anticipated US$100 billion a month in further asset purchase programmes will be key factors keeping global interest rates low, said Mr Nattakrit.
Gold has a positive trend against the backdrop of aggressive monetary stimulus and a tepid economic recovery, but there is no target price for this asset class, according to Tisco Bank.
For the past six months, fund inflows moving into megatrend mutual funds saw a 35% year-on-year rise, compared with the first six months of last year, said Vorasinee Sethabutr, head of wealth product development.
Additional inflows channelling into megatrends in mutual funds are expected to continue in the second half, but the value is not expected to be as substantial compared with the first half because of higher uncertainties in the global financial markets, said Mrs Vorasinee.
Tisco Bank offers Tisco Strategic Fund and Tisco Global Digital Health Equity Fund, focusing on investing in innovative and digital healthcare solutions.
Other funds with megatrends as their investment theme are One Global E-Commerce Fund and One Ultimate Global Growth Fund.
The average growth of the four mutual funds is around 30% year-to-date.