Market Anticipates Fed Rate Cuts, Weak USD Solution! Fubon’s New Multi-Asset Fund Approved

Fubon Dual-Core Strategy Multi-Asset Fund was officially approved by Taiwan Depository & Clearing Corporation on Tuesday (12th), having raised approximately NT$5.5 billion during its subscription period—making it one of the few new funds in Q2 2024 to surpass NT$5 billion in fundraising.

Regarding asset allocation, Fubon投信 investment strategist Chen Zhen-Yi outlined the initial strategy:

• Growth stocks: Prioritized allocation to semiconductor blue-chips, with phased investments to mitigate risks amid historic market highs.

• Income assets: Focused on high-dividend, low-volatility instruments to stabilize NAV during portfolio construction while ensuring yield generation.

• Non-US bonds: Exposure to New Zealand, Australian, UK, and Eurozone government bonds to capture yield opportunities amid global monetary easing, including potential rate-cut gains.

Chen also emphasized gold’s role in hedging "de-dollarization" trends, though its recent rally to record highs prompted a diversified allocation approach. Meanwhile, Bitcoin remains favored due to supportive US policies, including three key crypto bills and 401(k) investment access.

Despite elevated prices for both gold and Bitcoin, the fund avoids short-term chasing, instead dynamically adjusting positions based on its proprietary GTS Global Turbulence Signal risk indicator. Gold-related assets (ETFs/thematic funds) are capped at 20%, while Bitcoin ETF exposure adheres to Taiwan FSC regulations at 5%.

Fubon投信 noted that amid geopolitical tensions and tariff uncertainties, traditional safe-havens like gold retain appeal over newer alternatives. Accelerated central bank gold purchases in 2023 further bolstered support.

Notably, Harvard University’s endowment recently allocated more to Bitcoin spot ETFs than gold, signaling a strategic pivot by the elite institution and marking Bitcoin’s evolution from experimental asset to institutional portfolio staple.

Should Fed rate cuts materialize alongside global recovery-driven non-USD currency strength, the USD may face additional pressure. The fund’s gold and Bitcoin ETF holdings serve as effective hedges against USD weakness, mitigating risks from potential FX market realignments.