SINGAPORE (Jan 29): William Low, head of global equities at Nikko Asset Management, and Iain Fulton, its investment director, who manage the Nikko AM Shenton Global Opportunities Fund and Nikko AM Global Dividend Equity Fund, are not too worried about the 25 basis point hike in the federal funds rate by the US Federal Reserve in December and the constant unsettling tweeting by US President Donald Trump. “Everything Trump does makes great headlines, but we’re reluctant to adopt our investment strategy around the latest tweet,” jokes Low. “Putting headlines to one side, we’re in a world where capital has moved pretty freely across borders, allowing businesses to be effectively financed by one global cost of capital.”

Companies with robust fundamentals, growth prospects and economic moats should be able to give good returns over the long term despite volatile geopolitics. Geopolitics becomes a problem only if it dramatically alters

discount rates applied to risk assets, Low says. An example of this is if global hegemony shifts from the US to, say, China, or if the renminbi continually displaces the US dollar as the world’s reserve currency. The US dollar remains the world’s reserve currency.

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