Investors wary of impact of coming Fed hike on portfolios

Singapore

INVESTORS are getting wary of what a Federal Reserve interest rate hike would do to their portfolios as the US economy continues to improve.

At the same time, they are still searching for returns in growth stocks and Asian markets like China, India, and Japan, as stocks in the US and sovereign bonds look pricey.

"If the pace of an interest rate increase is too fast, and communications are not well managed, people focus on the headwinds. That environment is bad for equities and bonds," said Pang Kin Weng, a Schroders multi-asset fund manager in Singapore who manages S$2 billion worth of portfolios, including one focusing on Asian income.

"If the increase is gradual, and communications are well managed, investors will be focused on the tailwinds for growth, and (will be) convinced that interest rates won't kill o…