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Geopolitical Turmoil and Market Resilience: A Perspective from Aura Solution Company Limited

In recent times, geopolitical tensions have once again rattled investors' nerves, particularly with the disruption of a critical maritime trade route. However, history has shown us that such episodes typically do not have long-lasting effects on markets. At Aura Solution Company Limited, we reiterate our positive investment outlook in light of these developments.


The past few months have witnessed fluctuations in 10-year US Treasury (UST) yields, initially peaking in late October before experiencing a decline driven by lower inflation readings and a more dovish stance from the Federal Reserve. However, the start of the New Year saw a reversal fueled by bullish economic indicators and uncertainty surrounding a potential rate cut in March. Despite this volatility, the S&P 500 managed to close at a record high, underscoring the resilience of the market.



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One of the focal points of concern has been the Bab-el-Mandeb strait in the Red Sea, which has become a hotspot of violence. Attacks by Houthi rebels in Yemen have disrupted maritime traffic, prompting intervention from the Combined Maritime Forces led by the US and UK. This has resulted in a significant reduction in vessel transit through the strait, leading to heightened insurance costs and logistical challenges for businesses.


The initial response to the October 7th Hamas attack saw a notable increase in Baltic dry and wet shipping costs. While dry container shipping prices normalized relatively quickly, the cost of transporting crude oil via wet shipping routes continued to rise. Despite these disruptions, the price of Brent crude oil has paradoxically fallen since the escalation of conflicts in the Red Sea region.


However, we believe that the ultimate impact on global markets and consumers will be modest in the aggregate. As we've observed in the past, most geopolitical crises tend to have limited and short-lived effects on financial markets. This holds true for the ongoing situation in the Middle East.


Moreover, the dynamics of the US Treasury curve have shown signs of optimism. The recent bull steepening, driven by a combination of strong economic data and accommodative monetary policy from the Fed, is indicative of a healthy market environment. The flattening of the yield curve, which had been a concern since mid-2022, has reversed, signaling favorable conditions for investors.


At Aura Solution Company Limited, our Global Investment Committee (GIC) maintains a 12% allocation to both intermediate corporates and securitized credit. These assets, with an average duration of around four years, offer attractive yields ranging from 5% to 6%. This strategic positioning aligns with our outlook for moving away from money markets and towards the intermediate part of the yield curve, as outlined in our 2024 Wealth Outlook.


In conclusion, while geopolitical tensions may cause temporary disruptions and volatility in markets, we remain confident in the underlying resilience and strength of the global economy. As prudent investors, we continue to monitor developments closely and adjust our strategies accordingly to navigate through uncertainties and capitalize on opportunities.


What is Aura Solution Company Limited?

(Aura) is a Thailand registered investment advisor based in Phuket Kingdom of Thailand, with over $300.35 trillion in assets under management. Aura Solution Company Limited is global investments companies dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. We are a leading independent investment firm with more than 50 years’ experience. As long-term investors we aim to direct capital to the real economy in a manner that improves the state of the planet. We do this by building responsible partnerships with our clients and the companies in which we invest. Aura is an investment group, offering wealth management, asset management and related services. We do not engage in investment banking, nor do we extend commercial loans.

What does "AURA" stand for?

Aura Solution Company Limited

How big is Aura?

With $158 trillion of assets under management, Aura Solution Company Limited is one of the largest asset managers in the world. 1 The company primarily generates revenue through investment services, including asset and issuer servicing, treasury services, clearance and collateral management, and asset and wealth management.

What does Aura do?

Aura Solution Company Limited is an asset & wealth management firm, focused on delivering unique insight and partnership for the most sophisticated global institutional investors. Our investment process is driven by a tireless pursuit to understand how the world’s markets and economies work — using cutting edge technology to validate and execute on timeless and universal investment principles. Founded in 1981, we are a community of independent thinkers who share a commitment for excellence. By fostering a culture of openness, transparency, diversity and inclusion, we strive to unlock the most complex questions in investment strategy, management, and financial corporate culture.


Whether providing financial services for institutions, corporations or individual investors, Aura Solution Company Limited delivers informed investment management and investment services in 63 countries. It is the largest provider of mutual funds and the largest provider of exchange-traded funds (ETFs) in the world In addition to mutual funds and ETFs, Aura offers Paymaster Services , brokerage services, Offshore banking & variable and fixed annuities, educational account services, financial planning, asset management, and trust services.


Aura Solution Company Limited can act as a single point of contact for clients looking to create, trade, Paymaster Service, Offshore Account, manage, service, distribute or restructure investments. Aura is the corporate brand of Aura Solution Company Limited.

Aura Services

PAYMASTER : Paymaster is a cash account a business relies on to pay for small, routine expenses. Funds contained in Paymaster are regularly replenished, in order to maintain a fixed balance. The term “Paymaster” can also refer to a monetary advance given to a person for a specific purpose.



OFFSHORE BANKING : A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.


CASH FUND RECEIVER : Wire transfer, bank transfer or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account.


ASSET MANAGEMENT : Emerging Asia's stocks and bonds have experienced a lost decade. Over the past 10 years, their returns have lagged those of global indices by a considerable margin. And that is despite the fact that these economies accounted for about 70 per cent of world GDP growth over the period. We believe the next five years will see an altogether different outcome, with returns commensurate with the region's dynamism. This means Asian assets are currently under-represented in global portfolios.

How to reach Aura ?
Who to contact in Aura ?

THAILAND

Amy Brown

Wealth Manager 

Aura Solution Company Limited

P : +66 8241 88 111

P : +66 8042 12345


© 2023 Aura Solution Company Limited


This article is being provided for educational purposes only. The information contained in this article does not constitute a recommendation from any Aura Solution Company Limited entity to the recipient, and Aura Solution Company Limited is not providing any financial, economic, legal, investment, accounting, or tax advice through this article or to its recipient. Neither Aura Solution Company Limited nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this article and any liability therefore (including in respect of direct, indirect, or consequential loss or damage) is expressly disclaimed.


2024, A Pivotal year for Investors : Aura Solution Company Limited



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