China may be an odd choice for investors seeking shelter from a Sino-U.S. trade ...
SYDNEY/HONG KONG - China may be an odd choice for investors seeking shelter from a Sino-U.S. trade war. Yet, money managers in Asia are pouring funds into Chinese stocks as the long-term promise of a growing middle class trumps more immediate fears about tariffs.
The anxiety has forced investors into defensive holdings such as the safe haven yen, gold and U.S. Treasuries. “Names in the sportswear and beverage sectors have performed well as trade issues have not impacted them and their strong branding and high margins have attracted investors looking for less cyclical and global trade exposure,” Duhra said.In an effort to revive its $14 trillion economy, China has pumped cash into banks, fast-tracked infrastructure spending and rolled out tax cuts worth trillions of yuan to support consumers and businesses. And, it has said it could do more.
CSI300 has risen 22% in the same period, outpacing the 6% gains in the MSCI Asia ex-Japan index and the 15% rally in the S&P 500 Pimco, which has $1.76 trillion in assets under management as of March 2019, is betting on U.S. Treasuries and Australian government bonds to take cover if the world slides into recession, but also sees opportunities in Chinese debt, said its co-head of Asia-Pacific portfolio management, Robert Mead.None of the fund managers had recession as their base case scenario although most saw downside risks to growth and possibility the Federal Reserve would ease policy, an outcome that could hurt the U.
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