Managing drawdowns in Asian equities

THE state of markets in 2017 was an anomaly, as volatility was extremely subdued throughout the year while most markets racked up strong double-digit returns. Asia ex-Japan equities delivered total returns of 42 per cent in US-dollar terms or 31 per cent in Sing dollar terms, ending the year as one of the standout performers.

While such a return is indeed handsome, it came on the back of its lowest intra-year decline in history, This is a statistic that investors should not ignore.

Historically, Asian equities tend to see large intra-year drawdowns in the course of a calendar year, which can have a detrimental effect on an investor's portfolio and subsequent financial decisions.