US

The covid-19 death toll in the US has increased to more than 70,000, more than 20,000 of which were in New York State. US President Trump has expressed the desire to restart economic activities as soon as possible, reflecting the downward pressure on the US economy. Over the past 5 days ending Thursday, among the three major US stock indexes, the NASDAQ rose around 1%, while the S&P 500 and the Dow fell around 1% to 2%. In terms of economic data, initial jobless claims exceeded 3 million for the 7^th consecutive week, ADP data showed that US companies laid off a record high of over 20 million workers in April. Although the data shows a bleak economic outlook, the chairman of the US Federal Reserve Bank of Atlanta claimed that under the effect of economic stimulus, the United States is unlikely to experience a deep recession in the short term. Facing the pressure of huge fiscal expenditures, the US Treasury raised the forecast of bond issuance in the second quarter of this year to a record of nearly 3 trillion US dollars. US will release CPI and retail sales data next week.

 EU

The epidemic seems to be getting under control in Europe, many countries including Italy, Germany, and France have begun to lift their lockdown measures in stages. However, the European stock market saw some correction after the recent rally. Over the past 5 days ending Thursday, French, German, Spanish and Italian indexes fell 3.14% to 4.60%. The Bank of England maintained its policy rate unchanged at the record low of 0.1%, but hinted that it might consider further loosening next month. The European Central Bank President Lagarde mentioned the need to utilise unconventional policy tools during “extraordinary times”, market expects the loose monetary policy in the Eurozone to stay. Next week, 2020 Q1 GDP data for the Eurozone and the United Kingdom will be released.

China

Controversy about the origins of the covid-19 virus has raised Sino-US tensions once again, US President Trump also questioned whether China is fulfilling the provisions of the first phase trade deal. The series of negative news pressured the market downwards, the Hang Seng Index gapped lower on Monday, falling over the week. The latest news on Sino-US trade relations  were positive, it was reported that the top trade negotiators from both sides held a phone call on Friday, promising to create favourable conditions for the implementation of the trade agreement. China will announce data on CPI and fixed investment next week.

<Prepared by Harris Fraser Research Team>

Mercer, a global consulting leader in advancing health, wealth and career, and a wholly owned subsidiary of Marsh and McLennan Companies (NYSE: MMC), has announced that a leading wealth management and investment firm Harris Fraser Group is among the latest group of fund industry participants to join Mercer FundWatchtm, the forward-looking fund ratings platform that delivers objective, institutional-grade investment fund research to individual investors and their financial advisors.

Mercer FundWatch was launched last year as a free-of-charge tool for members of the Singapore and Hong Kong investing public to make more informed investment decisions.

Janet Li, Wealth Business Leader for Mercer in Asia, said Mercer FundWatch was a revolutionary new information source that would benefit fund managers and investors.

“A large and growing list of leading global and regional fund managers have submitted their funds to be rated because these firms see the significant value of our impartial research in enriching the quality of information in the market. At the same time, advisors like Harris Fraser want to ensure their clients have the best mix of data on funds,” said Ms Li.

The research pipeline continues to build with an increasing number of funds available through the platform.

Tom Curtis, Program Leader for Mercer FundWatch, noted that the service was fundamentally different from other fund rating offerings.

“Firstly, we are not primarily driven by past results. Rather, we apply the same rigorous qualitative research to reviewing a fund that we do when performing research for our institutional clients,” Mr Curtis said. 

“Funds are rated based on our view of how likely it is that the fund will outperform the relevant index over the long term. Rather than making recommendations, we provide fund consumers and their advisors with impartial information so that they are empowered with data and insights to select a fund that suits their needs,” he said.

Andy Lam, Managing Director Investment Research at Harris Fraser Group said that the firm’s participation in Mercer FundWatch was part of their commitment to educating their clients.

“Having been aware of Mercer’s institutional research and tools for many years, we know first-hand the depth of their expertise and the caliber of their research teams and products. Accessing Mercer’s unbiased reviews of funds provides our advisors with another arrow in the quiver as they work with clients to make informed investment decisions.”

More information is available at www.mercerfundwatch.com. Mercer’s research is impartial and not influenced by client relationships.

About Harris Fraser Group

The Harris Fraser Group specialises in wealth and investment management.

The Group’s mission is to be clients’ trusted wealth and investment management partner. Harris Fraser’s team of experts provides bespoke financial advice backed by thorough research to achieve clients’ financial goals. Their extensive and diversified services go beyond traditional financial offerings.

In 2018 Harris Fraser Group became the wholly owned subsidiary of Mason Group Holdings Limited (stock code: 273.HK).

Harris Fraser partners with Pangenia to offer a range of parenting and childcare solutions, from physical and mental health screening to inborn talent genetic discovery and allergy tests. To find out which are best for you and your children, we spoke to Pangenia to discover why each test is important, what’s involved, when they should be done and who they are best suited to.

Why do you think there has been an increase in the popularity and prevalence of childcare solutions that look at genetics?

Genetic tests provide parents with a wealth of great information about their child. This information can guide parents, allowing them to decode their children’s DNA for a healthier, better future, choosing the right extracurricular activities for their children and preparing for any allergies, and diseases that may arise.

Why is the Mygenia Physical and Mental Health screening important and what can it help to detect?

The Mygenia kids panel detects a variety of mental and physical health-related diseases, including ADHD, autism, Asperger’s syndrome, congenital heart defects, leukemia, epilepsy, cystic fibrosis, galactosemia, haemophilia, and Fragile X syndrome.

It can be difficult to know when children have some kind of mental or physical disease prior to symptoms appearing and this means opportunities for taking preventative action can be missed. Once the parents know the health condition of their children, they shall seek professional help for appropriate treatment.

What does the screening involve and when should children get it done?

Children should do this screening as early as possible, because the earlier we can detect any health conditions and provide treatment, the more effective it will be.

Who is this test best suited to or who will benefit most from taking this test?

If a child has a family history of any of the diseases that this screening tests for, there will be a higher chance of the child inheriting that disease, so we would particularly recommend the Mygenia panel for them.

What are the benefits to both children and their parents in taking the Inborn Talent Genetic Discovery Test?

When it comes to parenting, we are always looking for a first-mover advantage – the earlier you can plan for your children, the greater potential they have of competing with their peers. However, there are countless courses, programmes and activities for us to choose from, and we do not always know which ones are best for our children. On top of that, we have limited resources, and our children have limited time and energy to attend such courses. Genetic testing can give us insights into a child’s abilities, character and physical aptitude.

What information can this test provide?

The test is divided into three categories:

• Character, including attention, social ability, independence, short-term memory, responsibility, creativity, reward dependence, grit, stress, tendency towards melancholy, introverted behaviour, sensitivity, curiosity, enterprising nature, empathy, self-protection, precociousness and self-reflection
• Physique, including calcium absorption, iron absorption, blood sugar control, folic acid metabolism, hereditary allergies, eczema and other skin issues, weight loss, high-fat food response, muscle burst, muscle endurance, exercise versus weight loss, exercise versus blood sugar control, post-exercise restorative damage, tooth development, astigmatism, skin pigmentation, myopia, lactose tolerance, sweetness preference, vitamin absorption
• Talent, including aptitude for languages, maths, reading, learning, logical thinking, dance and music.

When is the best time for a child to take this test?

The better we understand a child’s talent, the better we can be prepare for their education and developing their interests so the earlier this test is carried out, the better we can prepare for our children’s futures.

Why are Delayed and Immediate Allergy Tests so important?

More than 40 per cent of children have allergies in Hong Kong and 60 per cent of its general population has asthma. A lot of people in Hong Kong claim to have nasal allergies, but not all of those have found out the cause of these allergies and symptoms will only worsen. By discovering the allergens that cause a reaction in someone, you can prevent their contact with these allergens, which is important because allergies are associated with the immune system and once the immune system is weakened, our body is more vulnerable to virus and bacteria.

What do each of these tests involve and is there anything parents should be aware of beforehand?

For the Immediate Allergy Test, 3ml of blood is needed for the test; this measures the levels of different igE antibodies and looks at including 20 types of respiratory allergens and 60 types of food allergens. For the Delayed Allergy Test, we take a few drops of blood from the fingertip, and measure the levels of different igG antibodies, which detect food intolerances. If a child has not eaten a specific food in the past 6 to 8 weeks, this test will not be able to detect if there is a delayed allergy reaction.   

When is the best time for a child to take this test?

For the Immediate Allergy Test, we recommend drawing blood only from children aged three years and older. For the Delayed Allergy Test, the test is relatively simple and can be taken once children start eating solid food.

By applying the wealth management model to the healthcare sector, Harris Fraser is able to provide healthcare management solutions for children and adults, including healthcare planning, critical illness solutions and services that take control of genetic inheritance. Our solutions are in partnership with Pangenia, a leading professional molecular diagnostics (MDx) group in Hong Kong backed by an elite group of biotech scientists and executives.

Golfer Tiger Woods, champion chess player Bobby Fischer, composer Mozart – these are some of the greatest achievers in their respective fields, and at a very young age. Was their success down to inborn talent or did they put in the hours to get to the top?

It’s an ongoing debate. There is one side that favours the idea that people can be born with an aptitude for a certain pursuit while other people, however much effort they put in, will never reach the same dizzying heights of mastery. The other side of the argument believes that it is all down to the effort and hours that are put in. While Tiger Woods can be seen as a child prodigy, born with a gift for golf – it is also true that he had a golf club put in his hand before he even turned two years old, and at a time when his peers had barely begun hitting balls down the green, Woods had already won numerous tournaments and achieved a huge number of firsts in the field. Was he just ahead of the game, or born gifted?

In the book Outliers: The Story of Success, author Malcolm Gladwell argues that the key to success is putting in the hours – that anyone can put in 10,000 hours and master a skill. Research has shown that even if someone were perhaps born with a propensity for chess, maths, music or sport, someone else who puts in the same number of hours can overcome any differences in ability and mastery over time. In other words, any perceived inborn ‘talent’ will even out.

Other studies have shown, however, that perhaps there is an argument for being born with a certain ‘talent’, or with brains that are already inclined towards a certain area which when nurtured can result in mastery. It is not only physical attributes that are inherited, but an aptitude for maths, science, sport of music may be in your DNA. Creativity for example, a trait that can be particularly important in areas such as music and the arts, can be identified in the brain; some people seem to have genetics that make a brain more inclined towards creative thinking. This doesn’t necessarily mean that others can’t be similarly creative, but that it perhaps comes more naturally to those born that way.

In 2013 a study by researchers from the University of Helsinki found that one particular cluster of genes related to musical creativity belongs to a gene family known to be involved in the plasticity of the brain. Greater plasticity allows the brain to reorganise itself by breaking down and forming new connections and creativity is related to the ability of the brain to form large-scale networks and develop pathways between different areas.

If genes do dictate an inborn talent or gift, wouldn’t it be useful to know from an early age that you might have an aptitude for music so that you could pursue it? Or perhaps if you knew that your children were tone deaf from early on, it would save you – and them – time, money and effort in not pushing them to pursue something that they may never succeed in, will likely not enjoy and that could potentially destroy their self-confidence?

There’s an argument, of course, for allowing children to develop an understanding of these things by themselves. If people believe they are inherently suited – or not suited – to something, then that may change the way they approach things in life. It may remove incentive for them to try, because they don’t think they have a natural aptitude for it. Conversely, it may mean they don’t put in the effort required, and waste a perceived ‘talent’ as they believe they are naturally gifted and don’t need to try. And as research has shown that practice, dedication and effort can make you almost as good – if not as good – as those purportedly born with a gift or talent, this is important.

In a quest to give your children a leg up, genetic tests can provide useful information and allow you to tailor things to your children if they show an aptitude for certain activities, helping to allocate time and resources a little more thoughtfully. We mustn’t oversimplify the relationship between genes and a proclivity for certain things, but if our brains or genes are sometimes wired in such a way, wouldn’t it be nice to know and to nurture what we are born with?

Harris Fraser provides access to the Inborn Talent Genetic Discovery Test in partnership with Pangenia Group. This comprehensive testing package includes 48 different DNA tests covering skillsets such as language learning, reading and logical thinking, physical assessments related to muscle power and endurance, mental power including long- and short-term memory, creativity and persistence.

Allergies among children are on the rise. In Australia, for example, one in the ten children has some kind of allergy, while in the US there are nearly six million children living with allergies. In the UK, food allergies affect 7 percent of children, while in Hong Kong 40 percent of children has some kind of allergy.

An allergy is a reaction of the immune system when it comes into contact with an allergen. This allergen can be anything from food to dust, pollen or even an insect sting. The body’s reaction to this perceived threat can manifest in a number of ways, from a rash, a running nose or watering eyes, to the more severe than can include vomiting, diarrhoea or even difficulty breathing due to the swelling of the tongue or throat. In the case of an allergy, these symptoms usually appear within a couple of hours of contact with the allergen. Whatever the seriousness of the reaction, it’s worth knowing what triggers such a response in your child. Most are hereditary; some appear out of the blue; all have a huge impact on both the life of a child and that of their parents.

Allergy testing is straightforward and has a number of benefits. Here are just a few reasons why today, more than ever before, it may be prudent that your child takes one.

1. Allergies can run in the family

Children whose relatives suffer from allergies, as well as asthma, eczema and hayfever, are at an increased risk of developing the same allergies, particularly if either – or both – of a child’s parents have the allergy. It’s best to know early on whether your child is subject to the same allergies and an allergy test can provide this information.

2. As many as one in 10 children suffers from an allergy

The figures are high – and seem to be increasing. No one knows why this is, but the rise has been attributed to deteriorating air quality, changes in diets and increased hygiene that means children are less exposed to the microbes that help build a healthy immune system.

The most common allergies among children are to peanuts, milk, eggs, tree nuts, wheat, soy, fish and shellfish. Some of these – such as soy, milk, eggs and wheat – will usually be outgrown and by the time a child reaches the age of five they will likely be free from such allergies and the accompanying reaction. However, allergies to peanuts, shellfish, fish and tree nuts often persist and are likely to be lifelong. It is therefore worth gaining an understanding of such an allergy early on and learning how to live with it safely.

3. A seemingly common ailment could be something more serious

Children often have the sniffles or a runny nose, perhaps a tummy ache or bouts of sneezing, but these may not simply be a common cold or other ailment. Allergic reactions can manifest in manifold ways and such symptoms could signify anything from a pet allergy to a pollen or dust allergy to a mild allergy to a particular food. If you are regularly seeing these kind of symptoms – which also include coughs, a stuffy nose, headaches, puffy or itchy eyes – particularly out of the typical cold or flu season, an allergy test could shed light on their cause.

4. Allergies can be life-threatening

Some allergies result in minor discomfort or symptoms that can be handled, however others can be far more serious with high risk levels as dangerous as breathing difficulties and anaphylactic shock. Knowing what could cause such a reaction means you can take steps to avoid such things.

5. Identification can improve wellbeing

The response of the immune system to an allergen can be uncomfortable. None of the symptoms are pleasant, even if they are minor, and these can adversely affect your children and their performance. Knowing what can trigger a reaction in your child and how to avoid that can significantly improve their wellbeing ­– and yours.

6. Identification without a blood test is challenging

The alternative to allergy testing is for a patient to eat increased amounts of a suspected allergenic food under medical supervision. Skin tests are also an option where extracts of a suspected food are used in the pricking of skin to check for a reaction. Measuring Immunoglobulin E (IgE) in the blood is the most direct allergy test. IgE antibodies are made by the immune system to protect the body from bacteria, viruses, and allergens. They are normally found in small amounts in the blood, but higher amounts can be a sign that the body overreacts to allergens. An IgE test can confirm whether a discomfort is caused by allergy so exposure to such allergens can be prevented.

7. Confirmation and peace of mind

We cannot ensure our children’s safety if we cannot confirm their allergens. There is no cure but with confirmed knowledge of allergens comes better preparation to manage the condition and avoid the offending foods and exposure to them.  

Harris Fraser provides access to Allergy (IgE) Tests in partnership with Pangenia Group. This comprehensive allergy testing package identifies more than 20 types of respiratory allergens and 60 types of food allergen.

Harris Fraser remains the same service level despite the outbreak of coronavirus in Hong Kong 
 
Harris Fraser always strives to provide the best service to our long-term business partners and clients while taking care of our employees. Our dedicated teams of professionals are working on shift and remotely to continue providing services to support businesses. However, we appreciate your understanding of any occasional delays in our response to your enquiries or requests due to providers' operation which is out of our control. 
 
In case of any emergency, please contact your consultant or relationship manager directly. 

Thank you for your understanding and we sincerely apologise for any inconvenience caused.
 

Harris Fraser always strives to provide the best service to our long-term business partners and clients. Given the increasing number of confirmed COVID-19 cases and an heightened risk of a community outbreak in Hong Kong,  in the best interests of our clients and employees, our dedicated teams of professionals will be working on shift and remotely to continue providing services to support businesses. 

Despite the imminent threat of the COVID-19 epidemic, Harris Fraser will keep the existing service level unchanged. However, we appreciate your understanding of any occasional delays in our response to your enquiries or requests due to providers' operation which is out of our control. 
 
In case of any emergency, please contact your consultant or relationship manager directly. 

Thank you for your understanding and we sincerely apologise for any inconvenience caused.

Harris Fraser Group

23^rd March, 2020

Harris Fraser Group celebrates 30th anniversary this year. During the past 30 years, the group has continued to serve our clients and business partners with our expertise in insurance, portfolio management, property investment and any other wealth management solutions to protect their wealth and health.

Throughout the years, AXA Hong Kong and Macau has been offering a wide range of life, health, property and casualty protection, as well as wealth management and retirement solutions to help customers achieve stability and prosperity. Today, over 1.3 million customers in Hong Kong and Macau, from individuals to established businesses, count on AXA Hong Kong and Macau to financially protect them, their loved ones and their future.

We dedicate this award to all of our clients, partners and staffs who made this possible!

Early in March, following the dramatic oil price crash, fixed income markets showed signs of liquidity drying up and an unprecedented market crash followed. While we issued a warning in the early days of the crash, we see the recent dip as an opportunity for market entry. In order to support the market, global central banks have unanimously adopted dovish monetary policies, the excess liquidity could likely provide adequate downside protection.

As recession fears loomed and interest rates bordered zero, credit spreads have widened significantly. This could be an entry point to the market, as the liquidity crunch and the deleveraging activity sent bonds to undervalued levels. Amidst the uncertainty in economic growth outlook, fixed income exposure could improve risk adjusted returns in the portfolio. As monetary policies are expected to stay dovish throughout the economic recovery, corporations are also expected to receive sufficient support from local governments in order to save employment figures, the relative downside is minimised. The overall outlook for fixed income at this level should likely be positive over the year.

Fixed income products produced positive results in August. The Bloomberg Barclays Global Aggregate Bond Index rose 2.03%, US Investment Grade, Emerging Markets US dollar Bonds, and US High-yield bonds rose 3.14%, 0.25%, and 0.40% respectively. Global trade tensions intensified over the month with no apparent signs of slowing down, investors seek lower volatility amidst global uncertainty, increased demand for high quality instruments such as investment grade bonds continued to contribute to the indexes in August. Despite compressed yields, we remain optimistic about the prospects of the fixed income markets.

After Trump announced new tariffs on another 300 billion goods from China on August 1, China has finally retaliated and announced an additional 5-10% retaliatory tariffs on $75bn of US goods, and will resume 25% tariffs on US automobiles on 15 December. Later, Trump retaliated, increasing tariffs by 5% to 15%-30%, some of which will be implemented during the Chinese National Day, which has a strong political implication. With the end of the trade war nowhere in sight, our view of the economic outlook towards the end of the year is relatively negative. As shown by the worsening economic indicators around the globe, global corporate earnings is expected to be further pressured in the 2 remaining quarters and the equity market will likely face greater volatility. Holding fixed income as the core investment can allow investors to navigate the investment environment in such turbulent times and limit the downside risk of the investment portfolio.

After the Fed rate cuts in July, many central banks across the globe followed. Notable ones include Reserve Bank of New Zealand, which cut 50 points, exceeding market expectations; India by 35 points to a 9 year low; Thailand by 25 points, the first cut in 4 years, and Philippines by 25 points which was the second cut in 2019. Looking forward, we expect both the Fed and the ECB to slash the rates again in September, as the economic indicators showed more weakness in the past month. Deriving from the interest rate futures, we are looking at possibly around 2 cuts from Fed before the end of the year, while the ECB is expected to follow suit and cut at least 0.2% in total further into negative territory in 2019. With central banks potentially entering an interest rate cut cycle, increasing bond exposure in the portfolio can also better capture the capital appreciation.

Another pushing factor for bond prices is the high demand from various investors, especially European and Japanese investors. German bunds and Japanese government bonds are very safe investments which are considered risk free, but as money flow increased, quantitative easing policies deployed, investors becoming more risk adverse, and various central banks cutting interest rates to negative levels, it drove bond yields down to unreasonable levels. German bunds are all negative yielding, while Japanese government bond are almost all in the negative territory apart from the 20, 30 and 40Y bonds. As investors would still want to capture positive return, most of them turned their attention to the currently higher yielding US$ denominated bonds which are still relatively safe. Thus, the global yields are falling due to increasing demand driving prices up, and the situation is likely going to continue in the mid-term as there are no alternatives for the relevant parties to invest in. This could also partially explain the rally in global aggregate bonds, investment grade bonds and T-bills, which rose around 2-3.6% over the month despite the falling equity markets.

We also note that the EM bonds and high yield bonds performed much poorer than their investment grade partners, which was mainly driven by concerns over general economy, EM liquidity and debt situation. As Argentina’s elections ended with an unexpected result, Argentine stocks and currency crashed on the surprise, Argentine debt yield skyrocketed as concerns over possible sovereign default mounted. Global investors were concerned if there would be any ripple effects in the EM investing universe as there has been unhealthy levels of debt in several EM economies. As the global macroeconomic environment worsens, the outlook for the relatively risky high yield bonds and EM bonds are less positive.

As the markets expects the global central banks to potentially enter a rate cut cycle amidst trade woes and economic slowdown, the global investment landscape will likely be symbolized by a higher volatility and downside risk in the equity market. Investors should consider adjusting their portfolio and include more high quality debt to limit volatility while still getting positive returns. The balanced portfolio may improve the risk-adjusted return.

Written by Harris Fraser Investment Research Team

Harris Fraser Investment Research Team embraces a top-down analytical approach to deliver a satisfying risk-adjusted return to meet the objectives of our clients. We start with macro-level research on an individual country, region, or sector before doing technical analysis like cross-market money-flow and trends to identify investment opportunities.