Joanne Goh, Senior Investment Strategist at DBS Bank, recommends that investors maintain their equity exposure despite prevailing geopolitical risks, advocating for strategic diversification rather than broad market retreat. In a recent interview, Goh outlined her assessment of current market conditions and investment opportunities, particularly focusing on India's domestic sectors and emerging themes.
Geopolitical Risk Assessment and Portfolio Strategy
Goh acknowledges that geopolitical risk remains present, reflecting ongoing policy uncertainty across major economies including the United States. She notes that shifts in trade policies, tariffs, industrial policy, and foreign relations contribute to market volatility and varied cross-border effects. However, she emphasizes that such policy adjustments can create selective opportunities in areas linked to domestic manufacturing, defense, energy security, and strategic supply chains.
| Investment Approach: |
Recommendation |
| Equity Exposure: |
Maintain current levels |
| Diversification Strategy: |
Add lower correlation assets |
| Alternative Assets: |
Private equity, private credit, infrastructure |
| Real Assets: |
Gold and certain hedge fund strategies |
| Portfolio Management: |
Measured selectivity and diversification |
Rather than recommending a broad reduction in equity exposure, Goh suggests investors complement their equity holdings with assets that have lower correlation, including private equity, private credit, infrastructure, real assets such as gold, and certain hedge fund strategies to help manage portfolio volatility.
Sectoral Opportunities in India
The strategist identifies significant opportunities in India's domestically-oriented sectors, particularly those benefiting from government spending and policy support. She highlights that an environment where fiscal policy plays a larger role tends to support domestic sectors, especially when government spending and targeted reforms contribute meaningfully to growth.
| Favored Sectors: |
Growth Drivers |
| Infrastructure: |
Public capex and policy support |
| Capital Goods: |
Domestic demand linkages |
| Manufacturing: |
Government incentives and reforms |
| Banking: |
Credit environment and balance sheet strength |
| Healthcare: |
Government spending and domestic demand |
Through public capital expenditure, incentives, and targeted reforms, sectors with stronger domestic demand linkages and limited reliance on external trade may see relatively better earnings visibility.
Investment Strategy Framework
Goh advocates for the CIO Barbell Strategy, which allows investors to capture upside from long-term growth trends while generating stable income. This approach involves investing in companies aligned with secular trends such as aging global population and artificial intelligence adoption on the growth side, while focusing on high-quality bonds and dividend-yielding equities, including REITs, for income generation.
In risk-on environments, she emphasizes focusing on companies delivering strong revenue and earnings growth underpinned by long-term secular trends, while maintaining discipline in avoiding loss-making or speculative businesses. Balance sheet strength and consistent cash flow generation remain important criteria for resilience.
Sector-Specific Outlook
Information Technology
Goh continues monitoring India's IT sector for selective opportunities, noting that a more attractive entry point could emerge as global IT spending trends stabilize and AI monetization becomes clearer. She observes that larger players with established client relationships, strong balance sheets, and investments in cloud, data, cybersecurity, and AI platforms appear well-positioned to adapt business models toward greater productivity.
Banking Sector
The banking sector remains a key component with relatively strong structural characteristics. Banks are benefiting from an improved credit environment, with asset quality at healthy levels, manageable credit costs, and comfortable capital adequacy. Balance sheets, particularly among large private-sector banks, are positioned to support loan growth across retail, MSMEs, infrastructure, and manufacturing.
Infrastructure and Manufacturing Focus
India's infrastructure and manufacturing sectors merit continued attention, particularly given ongoing global supply-chain diversification trends. Government-led initiatives such as Make in India, production-linked incentives, and sustained public capital expenditure are supporting capacity build-out across roads, rail, ports, power, defense, and digital infrastructure.
| Key Initiatives: |
Beneficiary Sectors |
| Make in India: |
Manufacturing and assembly |
| Production-Linked Incentives: |
Electronics, autos, renewables |
| Public Capex: |
Infrastructure developers, capital goods |
| Supply Chain Diversification: |
Defense manufacturing, engineering |
This provides multi-year growth opportunities for infrastructure developers, capital goods, cement, and engineering players, supported by domestic demand and moderate exposure to global trade cycles.
AI Investment Approach
Regarding artificial intelligence investments, Goh suggests looking beyond the technology sector to participate in AI themes while managing concentration and valuation risks. She recommends focusing on "adapters" that embrace AI to drive efficiency gains and higher profitability, particularly large-cap companies that have more capital and data advantages to deploy AI at scale.
The strategist believes this approach offers better risk-adjusted exposure to the AI wave, as AI's impact extends well beyond technology, reshaping business models across the broader economy. She anticipates a widening AI-related productivity divergence between large and small businesses as adoption scales.
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