Goldman expects an 18% return for Asia-Pacific stocks in 2021 — here are the bank's investment ideas

Traders work at the Goldman Sachs booth on the floor of the New York Stock Exchange.
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SINGAPORE — Asia-Pacific will likely be in "a sweet spot" in 2021 as economies grow and interest rates stay low — and that will translate to better returns for equity investments, according to Goldman Sachs.

The bank has projected 18% of total returns in U.S. dollar terms for the MSCI Asia Pacific excluding Japan index next year, Timothy Moe, Goldman's co-head of Asia macro-research and chief Asia-Pacific equity strategist, told CNBC's "Street Signs Asia" on Monday.

Total returns include the capital gains from the index's climb, any foreign exchange gains and dividend payouts. Goldman's projection was based on better-than-expected growth prospects next year for global and regional economies, said Moe.

In a report published last Wednesday, Moe and other Goldman analysts outlined some investment ideas for Asia-Pacific stocks in 2021. The bank continues to favor North Asian markets, with an "overweight" stance on China (both A- and H-shares) and South Korea.