Tactical stock selection crucial to navigate US/China trade war
A tactical stock selection approach will be key for investors navigating the US/China trade implications, which means that they will need to understand that some sectors might be more affected than others, according to Premium China Funds Management (PCFM).
The firm said that sectors such as technology, transportation, commodities or energy might be hit slightly harder by consequences of the trade tensions. At the same time, the financial brokerage sector would be also expected to face possible higher volatility.
PCFM’s Jonathan Wu said that his both funds, Premium Asia Fund and Premium China Fund, had reduced their exposure to these sectors over the last six months, particularly to export-oriented Chinese companies.
“We expect both nations are motivated to strike a deal and the near-term market volatility will not be a major concern for long term investor in the Chinese equity markets,” he said.
“In the Premium Asia Fund, our holdings in information technology sector are mainly Taiwan and South Korea companies, which the impact would be much indirect from this round if trade talk.”
AUTHOR
Oksana Patron
Recommended for you
Outflows from an Australian private markets fund manager have caused FUM at Pacific Current to decline by $1 billion in the last quarter.
Former RIAA chief executive Simon O’Connor has joined the ethical advisory panel at U Ethical Investors.
Financial services leaders are “all cashed up with nowhere to grow” when it comes to M&A activity, according to Deloitte, with 90 per cent saying they have strong balance sheets ready for an acquisition.
As fund managers are urged to diversify their product ranges, they are finding a faster way to do this is via an acquisition of existing firms but experts say it is not without potential culture clashes.
