• Funds authorized for sale in Hong Kong fell 3.16% on average for January.
• Apart from bond funds (up 0.18% on average) and guaranteed funds (up 0.11% on average), all other fund groups by asset type incurred losses on average for the month.
• Commodities funds, incurring a loss of 6.79% on average, underperformed all other types of funds.
• Equity funds, posting a negative return of 4.42% on average, came in second from last on the performance league table, while mixed-asset funds fell 2.86% on average for the month.
• Global equity markets have registered a significant correction since mid-January, which has now rendered them oversold and undervalued.
• With the global credit default rate anticipated to decline to 3.0% by January 2011, the investment outlook for corporate and high-yield bonds remains positive.
• The sovereign debt crisis in the PIIGS countries looks set to dictate the direction of the financial markets for the time being. With the global fundamentals picture now considerably much stronger than it was in 3Q2008, there are more resources available to tackle the issue, which could then ignite another round of rally in the global financial markets.
• As such, this sovereign debt crisis provides investors another good opportunity to place their capital in high-volatility assets such as commodities and equities.