Manulife Investment Management's Global Intelligence report outlines potential risks and opportunities over the next 12 months, and beyond

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BOSTON, HONG KONG and TORONTO, Jan. 21, 2020 /CNW/ - Manulife Investment Management today released its biannual Global Intelligence report, a firmwide outlook highlighting notable perspectives from its private and public markets investment teams. In the new report, Manulife Investment Management draws attention to Asia and believes the region remains attractive, particularly within emerging markets, amid the economic slowdown that's expected to continue and hit a trough later this year, and likely followed by a gradual recovery.

The report also reviews the negative-yielding debt landscape in the investable fixed-income market in detail and asserts that asset managers need to consider certain strategies, including: taking advantage of their global footprint, adopting a nimble approach, and demonstrating acumen across a wide range of less traditional and fundamentally active strategies to help generate positive returns.

Asia remains attractive amid the slowdown with the prospect of a gradual recovery

According to Sue Trinh, managing director of global macro strategy at Manulife Investment Management, Asia's expected growth rate of 5.1%¹ in 2020 continues to incite envy in the developed world. Asia also occupies the quality end of the emerging-market universe, making it more appealing to investors, however it's not immune to the global economic slowdown.

"Asia remains an attractive region, but its economic downturn has yet to hit a bottom," said Ms. Trinh. "The stubbornly low economic growth and subdued inflation leave markets vulnerable to a reversal in sentiment, and we expect a prolonged bottoming-out process with only a gradual recovery. As the world's growth engine, the path to Asia's economic recovery has enormous relevance to investors, but recovery is constrained by numerous headwinds to growth and governments' ability to continue with monetary policy."

For detailed views on Asia's economic growth path, click here.

It takes more to generate positive returns in the era of negative-yielding debt

Negative-yielding debt represents a sea of change in the investable fixed-income market, creating undesirable knock-on effects for investors, banks, and policymakers alike. "We have now officially entered an alternate fixed-income reality," said John F. Addeo, CFA, global CIO of fixed income at Manulife Investment Management. "The incapability of traditional monetary policy, including near-zero rates, in stimulating economic growth is the primary driver for negative yields, in our view."