Sun Life Philippines is expecting the Philippine economy to have a U-shaped type of recovery and a return to trend line growth in the next two years.
This is according to Sun Life Chief Investments Officer Mike Enriquez who recently presented his market outlook for the year 2021.
“Based on latest GDP forecasts, we are anticipating a 4% to 5% growth for 2021. The full year 2020 GDP is projected at -8.8%, which implies an estimated -5.7% in the fourth quarter of 2020,” he said. “The year 2021 has potential to be a strong recovery year, but only if a fiscal stimulus is passed early and it impacts households.”
As for BSP policy rates, Enriquez sees one more cut of 25 basis points for the coming year to further provide liquidity in the system.
Volatility to continue
While major economies have started to re-open, financial markets rebounding from their recent lows and sentiment changing from fear to fear-of-missing-out, Enriquez sees volatility persisting in the coming year.
“Although the Philippine Stock Exchange index (PSEi) rallied and trimmed its losses after vaccine news, the index remains at overbought levels and a correction is possible in the near-term,” he explained. “We expect the PSEi to reach 8000 next year with an EPS growth of 45%, driven by the expected recovery of the consumer discretionary, real estate, and industrial players in the stock market.”
Given these developments, Enriquez advises investors to stay committed to their financial goals. “The economy is not where we want it to be just yet, but a recovery is in the horizon as it always is after a period of recession,” he said. “By riding the wave of volatility, investors can reap the rewards later on.”
Choosing the best fund
An important step to take is knowing one’s risk profile and tolerance, as this will determine where he should invest his money in. Sun Life Asset Management Company, Inc. (SLAMCI) offers a wide range of funds that could match various risk profiles.
For instance, those who can tolerate market fluctuations in exchange of potential high returns may opt to invest in the Sun Life Prosperity Equity Fund. Meanwhile, those who are keen to have a steady ride throughout his investing journey can opt to invest in the Sun Life Prosperity Money Market Fund or the Sun Life Prosperity Bond Fund.
“No matter what direction an investor takes, what is important is that he commits to his financial goals and invests regularly and consistently,” Enriquez said. “Time in the market will pay off in the long run, so it is always best to stay the course.”
Those who wish invest in the Sun Life Prosperity Funds may visit www.sunlifefunds.com or talk to a Sun Life financial advisor today.