“With moderate global economic growth and therefore consequently modest earnings growth, we do not expect further monetary easing this year. As such, most asset classes are unlikely to replicate last year’s strong performance. This is why we suggest a risk-based balanced income strategy to preserve and to grow capital through bonds yields and stock dividends," Raza continued.

For the first quarter of 2020, UOBAM is overweight on fixed income and alternatives, while neutral on equities and underweight in cash and commodities.

“With no interest rate policy moves expected in 2020, bond yields are likely to stabilise and to remain low. However, with corporate bonds and Asian bonds reasonably valued, there are opportunities to buy on price dips. We expect an annual return of about 3 to 4 per cent for fixed income this year.”

Within fixed income, UOBAM prefers investment grade credits in developed markets as well as issuances by companies that are market leaders and backed by strong government support.

“For equities, our neutral call for the first quarter is an upgrade from underweight in the second half of 2019. We expect global earnings growth of about 7 per cent in 2020 to drive returns and will look out for more signs of sustained economic growth before increasing our positions further.

“We favour US equities to Asian equities in anticipation of resilient American corporate profits. While we are currently neutral on Asian equities, we will shift to a positive weightage should conditions such as greater improvement in global economy and trade and easing of the US dollar materialise. Within Asia, Singapore equities in particular offer attractive valuations and growth potential supported by the government’s fiscal flexibility,” Raza added.