Investment priorities in the fourth quarter of 2024 should focus on managing volatility, with diversified portfolios expected to continue to perform well, according to HSBC Global Private Banking.

HSBC Global Private Banking said it was continuing to advise high net worth and ultra high net worth clients to take an optimistic view on markets, in a year when it has paid to have put cash to work – with equities up “strongly” and bonds benefiting from rate cut expectations.

In its Q4 investment outlook, An Optimists Guide to a Shifting Landscape, HSBC Global Private Banking noted that while the US economy had slowed, it did not foresee an imminent recession.

It pointed to the quick market rebound after the sell-off at the start of August as evidence that investors were continuing to look for buying opportunities, supported by the prospect of rate cuts, corporate earnings improvement, and innovation boosting productivity.

Its four investment priorities included targeting earnings endurance, with the firm stating that plenty of companies had shown they could deliver strong earnings, and while the tech sector continued to appeal, other sectors were providing attractive alternatives.

‘Putting cash to work’ was another priority as global rate cutting was making cash less attractive, with HSBC Global Private Banking recommending locking in bond yields on quality credit before they fall further, and using multi-asset strategies to “tap into a broad opportunity set”.

HSBC Global Private Banking also highlighted its aim of bridging uncertainty, with volatility strategies and hedge funds potentially providing protection against the downside while remaining invested.

Finally, the firm said that Asia’s diverse and expanding capital markets offered attractive prospects for diversification, with promising opportunities from its resilient growth leaders and quality bonds, particularly in Japan, India and South Korea.

“It’s easy to feel nervous about the markets, but we are optimistic that diversified portfolios will continue to do well,” said HSBC Global Private Banking and Wealth CIO, Willem Sels.

“While the landscape is shifting, the opportunity set is rich and diverse. A global mindset and a multi-asset approach are the way to go.”

HSBC Global Private Banking and Wealth CIO for Asia, Cheuk Wan Fan, added: “With expected GDP growth of 4.7 per cent in 2024, Asia’s economic engine benefits from structural trends, AI-driven innovation and an investment boom fuelled by the supply chain revamp and green transformation.”

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