Macro Research 4Q21 Market Report Card – Developed Market | FSMOne SG - Research Highlights

Macro Research

4Q21 Market Report Card – Developed Markets Lead the Way

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• Global markets (MSCI ACWI Index) grew in 4Q21 (+5.8% in SGD terms). Our top 3 performers (in SGD terms) were US (+10.1%), Taiwan (+7.8%), and Europe (+5.0%).

• US: We remain neutral on US. We already saw a sharp correction for US equities in Jan 2022, but valuations are still slightly elevated and vulnerable to earnings disappointments and policy uncertainty.

• Taiwan: We are optimistic on Taiwan, with its high allocation of Semiconductors equities (especially TSMC). While there is a risk of a near-term supply glut, the broader long-term outlook remains very positive for Semiconductors due to digitalization, and therefore for Taiwanese equities as a whole.

• Europe: We are also positive on Europe. Though they are currently facing a fresh wave of Omicron variant which has hurt sentiment, the Euro Stoxx 600’s cyclical tilt can benefit from the global economic recovery. Investors looking for Developed Markets Exposure should look towards European equities, especially with valuations in Europe much more attractive than in the US.

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