By Nick Hedley
Singaporean investment manager Temasek increased its
allocations towards U.S. Treasury exchange-traded funds (ETFs) and technology
stocks including Toast in the first quarter, according to a new securities
filing.
As yields surge and Russia’s war on Ukraine fuels recession
fears, some investors are growing more bullish on certain segments of the bond
market.
Marc Seidner, chief investment officer for non-traditional
strategies at PIMCO, said in a recent research note that while the fast rise in
yields has resulted in price losses on existing bonds, “it has also created a
better starting point for new investments in terms of both potential income and
diversification attributes.”
The 10-year U.S. Treasury yield has risen to about 3.25%
from 1.63% at the start of the year. As a result, “Treasuries could provide
positive real yields – in a comparably safe and liquid asset – if you believe
the Fed can get inflation back down even close to its target level,” according
to PIMCO.
Temasek, which had a net portfolio value of S$381 billion
(US$275 billion) at the end of March, significantly increased its exposure to
the Schwab U.S. TIPS ETF, which tracks an index of inflation-protected U.S.
Treasury securities.
It also added to its positions in the iShares U.S. Treasury
Bond ETF and the Invesco KBW Bank ETF.
At the same time, Temasek increased its stake in Toast, a U.S.-based
cloud-based restaurant management software company, and in Salesforce, Amazon,
DoorDash and Singapore-based tech group Sea.
Temasek exited its investments in Markit, the iShares Broad
USD Investment Grade Corporate Bond ETF, and Intel Corporation, while trimming
its stake in Airbnb.
Temasek has been increasing its allocations beyond Asia in
recent years. As of March 31, 36% of its portfolio was invested outside of the
region, up from 22% in 2010.