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
Natixis Investment Managers has hired a distribution director to specifically focus on the firm’s work with research firms and consultants.
The use of total portfolio approaches by asset allocators is putting pressure on fund managers with outperformance being “no longer sufficient” when it comes to fund development.
With evergreen funds being used by financial advisers for their liquidity benefits, Harbourvest is forecasting they are set to grow by around 20 per cent a year to surpass US$1 trillion by 2029.
Total monthly ETF inflows declined by 28 per cent from highs in November with Vanguard’s $21bn Australian Shares ETF faring worst in outflows.
