How great would it be to have an investment strategy that can deliver consistent returns over the long term, especially during a time when the global economy continues to face ongoing uncertainties? KBank Private Banking believes in the principle of Risk-Based Asset Allocation, which emphasizes managing investment portfolio risks while keeping potential losses within predetermined limits, allowing for steady returns in all economic conditions. This is achieved through investments in the K-ALL Roads Series fund, an innovative investment designed to meet the needs of investors in unpredictable market environments.

KBank Private Banking, in collaboration with Lombard Odier, shares its outlook on the global economy, suggesting two possible scenarios:

1. Limited Economic Impact with a 70% Probability (Base Case), where it is anticipated that the U.S. will eventually impose a 30% tariff on imports from China and an additional 10% on goods from other countries. This would result in a limited impact on the global economy, with a slowdown expected but not a recession. The U.S. GDP is projected to grow by 1.2% this year, and the Fed is expected to lower interest rates to 3.75% within the year.

2. Severe Economic Recession / Stagflation with a 30% Probability (Risk Case), where the U.S. fully implements the tariffs announced on April 2, with no relief measures, resulting in a U.S. GDP growth of only 0.5% while inflation remains high. The Fed may need to continue lowering interest rates to 2.0% this year to support the economy during stagflation.

Given this uncertainty, Lombard Odier, the main fund manager of the K-ALL Roads series, has set three primary goals for fund management: to generate consistent returns, protect investment capital, and ensure liquidity. The portfolio management strategies include:

  • Investing only in liquid assets
  • Diversifying risks
  • Continuously adjusting the portfolio (daily)
  • Controlling accumulated losses

Throughout the past period, the K-ALL ROAD Series fund has consistently and promptly adjusted its investment portfolio. For instance, at the beginning of the year, when the market showed positive signals, the fund had an investment ratio of 140% through leverage. Conversely, after the U.S. announced the tariff increase from April 2-9, the market risk surged significantly, prompting the fund to quickly reduce its investments across all assets to 60% to mitigate risk. Subsequently, the fund increased its allocation to riskier assets, such as stocks and corporate bonds, based on positive signals from various indicators. Currently, the fund's investment allocation has a higher weight in government bonds and inflation-linked bonds than historical averages, while the weight in corporate bonds and stocks in both developed and emerging markets is lower than historical averages.

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KBank Private Banking continues to recommend investing in the K-ALL ROAD Series fund as the largest portion of the portfolio (50-70%) to diversify risks. This investment can be made for the long term without worrying about the uncertainties of unpredictable situations that lead to market volatility. Investors can invest in the K-ALL ROAD Series fund according to their individual risk tolerance, with the option to gradually invest continuously, especially during times when the fund has reduced its investment ratio and holds cash to lower risk, making it an opportune moment to invest.