Singapore fund managers positive on Asian financial markets in 2024, expect stable global growth

  • Concerns about sustained high inflation have cooled with fund managers expecting FED rate cuts in 2024
  • Alternative/digital asset class is seen as the top growth driver followed by increasing millennial investors and ESG assets
  • Asia faces a heavy election calendar in 2024 with the Taiwanese presidential election being the focal point

Singapore, 4 January 2023 – With cooling inflation, economists around the world are predicting a soft landing in 2024. 57% of the IMAS Investment Managers’ Outlook Survey’s respondents share a similar sentiment as they expect stable global economic growth.

“A majority of the survey respondents are anticipating growth to be steady this year with easing worries on inflation compared to last year. Concurrently, respondents expect the Chinese real estate market to stabilize, leading to a positive outlook for Asian financial markets in 2024,” said Thomas Kaegi, Chairman of the IMAS Development Committee.

The annual Investment Managers’ Outlook Survey represents the views of some of the largest fund houses with combined assets under management of over US$35 trillion. This year’s edition saw participation from 79 respondents, comprising mostly C-suite personnel of fund houses in Singapore.

The survey questions are updated yearly to capture the latest and most pertinent topics in the industry. Elections in Asia is a new segment for the 2024 edition with 60% of the survey respondents opining that the Taiwanese presidential election has the highest potential for surprise.

Jenny Sofian, Chairman of IMAS, said “This survey acts as a pulse check on the industry amid significant changes. This year, we are seeing an increasing demand for innovative products in alternatives and digital assets, overtaking ESG investments for pole position. This reflects an important shift in investor mindsets, led by the growth of millennial investors.”

ESG investment’s drop in the pecking order of priorities vis-à-vis last year has come alongside a period where certain types of ESG strategies have underperformed. This has dampened the demand for ESG investment products, particularly among retail investors. However, asset managers continue to identify ESG as one of the top 3 future drivers of investment growth and ways for them to differentiate their business, suggesting confidence that ESG demand will grow in the longer term despite recent setbacks.

Around 62% of respondents say that the integration of ESG principles into their existing operations is a top priority for their ESG strategy this year, likely a reflection of ongoing demand by institutional investors as well as regulations to adequately consider ESG risks and opportunities in their investment process. The lack of data standardization and the multitude of ESG standards remain the most frequently cited barriers to implementing their ESG strategy.

With the rising trend of innovative products, numerous fund managers are looking to expand their capabilities in advanced analytics, machine learning, and artificial intelligence. Fund managers anticipate that technology will primarily disrupt fund operations, the middle office, and the research industry. IMAS continues to further facilitate the digitalization of the industry by bringing fintechs and asset management firms together. In 2024, we will be launching a Fintech directory which helps asset management firms discover tech solutions other industry players are using, as well as the newest innovations amongst our fintech members/partner firms.

On the end-of-the-year market calls for 2024, the US dollar is likely to maintain its current exchange rates against the Singapore dollar and the Chinese yuan at 1.37 USD to SGD and 7.32 USD to CNY, respectively. A significant 65% of respondents believe that the FED funds rate will experience a reduction.

Most respondents believe that the JP Morgan Asian Credit Index will end 2024 stronger with a 50 to 100 basis points drop in yield, while the MSC Asian Ex Japan and China Index are expected to rally by 10% to 20%. Overall, market indexes are anticipated to exhibit stronger performance in 2024.

This year’s infographic reporting on the survey findings can be found here.

About the Investment Management Association of Singapore (IMAS)

The Investment Management Association of Singapore (IMAS) was founded on 22nd September 1997 by 10 major financial institutions in Singapore and has since grown to include more than 160 members. As a representative body of investment managers, IMAS spearheads the development of the industry in Singapore, by fostering high standards of professionalism amongst practitioners and creating public awareness of, and interest in the industry. We act as a forum for members, promote exemplary best practices, represent members collectively, educate investors, and improve standards of research and fund management expertise, as a collective drive to promote the investment management industry.

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