In tandem with the focus on inflation, Ganeriwal is watching the labour market closely. He points to a clear downshift across multiple gauges, from multi-month payroll averages to participation and continuing claims. “We are seeing clear signs of labour market weakness,” he says, noting that the three-month average job creation has slipped to roughly 35,000 from an April–June trend of about 150,000, while continuing claims have risen and the labour-force participation rate has fallen to 62%. He adds that softer retail sales, higher credit card delinquencies and tighter bank lending standards in the Fed’s Senior Loan Officer Survey are the kind of early-warning indicators that usually weigh on growth and shape the Fed’s path.
The near-term risk, he cautions, is that markets get ahead of the macro. “It is increasingly likely that markets are moving ahead of economic fundamentals,” he says. “Markets celebrate prospective rate cuts, but these are a response to weakness, not a reward for strength.” Even so, he sees room to capture the benefits of falling rates while keeping portfolios resilient. “It’s prudent for investors to capture the upside potential from falling rates … yet also to reinforce diversification and avoid overexposure to economically sensitive sectors,” he adds.
Higher-quality bonds
With short-term yields already rolling over, many income-seekers are weighing whether to extend duration. Ganeriwal’s answer is pragmatic: “We advocate a focus on the ‘belly’ of the curve — bonds maturing in three to seven years — since these strike a reasonable balance: they lock in attractive yields, are less volatile than longer-dated bonds and stand to benefit meaningfully from rate cuts.”
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He argues that cash and ultra-short instruments still have a role for liquidity, but warns about reinvestment risk if policy rates fall as expected. “The real risk lies in being overexposed to instruments whose yields will fall most as central banks move,” he says.
For Singapore-based investors, he recommends emphasising higher-quality global bonds and selectively adding emerging-market local government debt to diversify currency exposure at a time when the US dollar is under pressure.
On credit, Ganeriwal highlights high-grade corporate bonds as attractive carry with potential for capital gains if yields compress further. “Yields are still elevated, and as rates fall, bond prices should rise, giving both income and some capital upside,” he says. The case for a diversified global allocation spanning Singapore and emerging markets is, in his view, a practical way to reduce the drag from a weaker dollar on Singapore dollar (SGD) returns.
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His caution is aimed squarely at the temptation to stretch for yield. “For bond investors, stretching too far for yield alone remains a central pitfall,” he says. “High returns often mean high risk.” That trade-off becomes more unforgiving if the economy slows, since lower-quality issuers face a higher default risk.
In short, his bond playbook for a pivot is to step modestly out the curve into the three- to seven-year segment, prioritise quality, diversify currency risk thoughtfully and avoid loading up on the riskier tail. “Taken together, these indicators inform both the timing and the magnitude of future Fed moves,” he says of the Fed-watching dashboard, so the allocation should stay nimble.
Resilience, not just yield
Falling discount rates typically favour REITs and dividend payers, but Ganeriwal stresses that the quality of income matters more than the headline number. For S-REITs, he suggests tracking occupancy, lease duration, sector and geographic diversification, and especially leverage and debt-maturity profiles. “Investors should ask: are the properties well-located and mostly occupied?” he says. “High occupancy and long leases mean rental income is stable.” He adds that REITs with lower borrowing and strong interest coverage are better positioned as financing costs decline.
Tweaks by the Monetary Authority of Singapore (MAS) late last year have given S-REIT managers greater flexibility, but Ganeriwal views sensible gearing and robust interest coverage as non-negotiables. Valuations also build a margin of safety: “Many S-REITs are still trading below the value of their assets,” he says, which could be meaningful if cash flows hold up into 2026.
Given idiosyncratic risks across sectors and sponsors, he prefers breadth over concentrated bets. “Instead of cherry-picking individual S-REITs, we recommend employing a diversified strategy via major SGX [Singapore Exchange] S-REIT indices,” he says, to gain exposure to the largest, most liquid names with quality portfolios and prudent leverage, typically backed by reputable sponsors.
The dividend stock screen is similar, favouring durability over optics. “The question is whether dividends are sustainable,” he says. Ganeriwal points to payout ratios, free-cash-flow generation and a track record of maintaining dividends through cycles as better signals than yield alone. “Utility, consumer staples, and telecom stocks often score well here.”
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Still, he does not underplay the cyclical risks. The same forces prompting the Fed to cut can pressure cashflows. “The reason rates are being cut in the first place is because the economy is slowing,” he says. “Risks for income investors include dividend cuts as corporate profits soften, rental compression for REITs and increased credit risk for lower-rated bonds.” In a deeper slowdown, debt-heavy companies or REITs could be forced to pare payouts.
His risk checklist for income portfolios is straightforward: do not chase yield, watch leverage and liquidity, and diversify. “Above all, ensure that core holdings … exhibit robust buffers: modest leverage, ample liquidity and diversified sources of revenue or rent,” he adds.
Ride a weaker USD
Ganeriwal expects a softer dollar to be one of the defining cross-currents as the Fed pivots. “A softer dollar tends to support capital flows into emerging market equities,” he says, with emerging markets in Asia likely to be a relative winner as valuations and growth prospects remain more compelling outside the US. For Singapore-based investors, he recommends avoiding US-centric tunnel vision and blending Asia’s resilience and emerging markets (EM) exposure with income assets such as S-REITs and quality bonds, plus a defensive allocation to gold.
The fund vehicle matters too. He points to broad Asia ex-Japan or EM equity funds as simple ways to capture the USD-downcycle beta, and suggests SGD-hedged share classes where appropriate. “When the dollar drops, money tends to flow into emerging markets, boosting local currencies and asset prices there,” he says, calling the second half of 2025 a favourable window to lean into the trend.
Closer to home, he sees a clean case for income. “Locally, S-REITs remain attractive,” he says, citing defensive portfolios and sustainable yields that often sit near 6% and are tax-exempt for Singapore residents. He also favours high-grade corporate bonds, where yields remain elevated enough to offer carry with room for capital gains if rates fall.
On commodities, he sees strategic value in gold, particularly when real rates are falling and the dollar weakens. “Holding some gold, via ETFs or savings programmes, can act as a hedge against currency weakness and add a defensive layer to portfolios,” he says, noting that domestic demand for gold has strengthened this year.
The overall approach he outlines for Singapore investors is a barbell across growth and income: internationally, rotate gradually toward non-US equities likely to benefit from a weaker dollar and more balanced global growth; domestically, lean into high-quality income streams in S-REITs and investment-grade bonds, with a measured sleeve in gold. “Rate cuts will be a key market event, but the real opportunity may lie in portfolios that look beyond the Fed to capture global growth opportunities and income streams,” he says.
The combination of a slower — but not collapsing — US economy, a softer dollar and relatively resilient Asia sets a different stage from the last cycle. Ganeriwal notes that for the first time in years, non-US equities outpaced US stocks by double digits in 1H2025, a result that aligns with the thesis of a broadening opportunity set.
Overall, Ganeriwal maintains a measured optimism, as he advises capturing the tailwinds from lower rates, while respecting the late-cycle risks that brought policy to the pivot in the first place. “Rate cuts will be a key market event,” he says. “But the real opportunity may lie in portfolios that look beyond the Fed to capture global growth opportunities and income streams.”
