Investing in a new world order: How to read the right market signals

Widespread market uncertainty globally is spurring family offices to seek as much clarity as possible to steer investment decisions, strategic and tactical allocations, and manager selection across multi-asset class portfolios.

Lingering volatility has also made it more important than ever for investors to have access to the right information. It’s now essential to be able to accurately analyze entire portfolios, understand performance drivers, and inform allocations to enhance return outcomes and manage risk, especially for private market assets.

The looming prospect of interest rate cuts at some point in the coming months is further heightening concerns and sharpening the focus on cash management.

Put simply, greater transparency is a key objective for family offices in Hong Kong, for investments of all types.

This reflects some of the common fears among Hong Kong-based family offices for 2024: 

• How and where to deploy pent-up cash as rate cuts materialize
• Preparing for shocks in terms of US equity valuations or prolonged macro uncertainty
• Identifying portfolio pain points to pre-empt a potential market meltdown, exacerbated by the problems in China’s economy
• A lack of tools or systems to manage private market assets, given their popularity and the continued investor comfort with the asset class
• Being able to identify where risks lay in different assets while only using basic tools such as excel – for example, the level of debt embedded in real estate and private equity, and whether valuations are accurate 
• Where to find technologies and tools to implement that can help improve portfolio aggregation, reporting and risk analysis

There is consensus among family offices in Hong Kong about the value of more accurate, timely and comprehensive data in enhancing internal portfolio management decisions. 

The wish-list of these investors includes the capability and resources to identify and understand areas where allocations are potentially too heavy, and therefore exposure risk is too high.

Desire for more transparency is also to drive better-informed discussions externally with third-party asset managers. This leads to more targeted questions and insights to assess decisions made over time.  Ultimately, investors can improve selection decisions by decomposing an external manager’s skillset.
Yet in isolation, an investment in technologies to solve problems with individual asset classes doesn’t address the logistical challenges in tying together separate datasets to analyze effectively.

The key is not to simply access the data, but also be able to interpret it regardless of the overall level of transparency, and ensure data security and privacy is upheld across the portfolio.

Learn how Nasdaq can help you:

Consolidate your portfolio view: Gain the portfolio intelligence you need to answer questions quickly when unexpected events or crises strike. 

Learn more about how we facilitate instant insight across your entire multi-asset class portfolio to create context faster and drive decision-making.

Shift your focus from operations to analysis: Dedicate your efforts more toward strategy than managing systems, vendors, and data inputs. 

Learn more about how our array of tools can help asset owners reduce the time spent by their teams on operational infrastructure.

Identify your best-fit partners, every time: Retain existing managers and identify new ones who best align with your priorities. 

Learn more about how the platform empowers asset owners with the insights they need to make the best decisions for their portfolios.