Int’l Investors Widen Allocation to China Amid Global Asset Volatility, Rising Diversification Demand

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Asset allocation diversification is an enduring need for global investors, said Fan Hua, head of BlackRock China. Chinese stocks and bonds have low correlations with overseas…

(Yicai) Nov. 12 -- Several multinational asset management companies said at the Shanghai Global Asset Management Forum hosted by Yicai that they plan to increase their allocation to Chinese assets because of heightened volatility in global assets and growing demand for risk diversification.

US stock index futures weakened, US Treasury yields jumped, and precious metal prices came under pressure after official data showed that the country’s consumer price index rose 0.3 percent in October from September, up for the third consecutive month, ramping expectations for a Federal Reserve interest rate hike.

In an environment of low interest rates and high volatility in single markets, the significance and value of global multi-asset allocation are increasing, Wang Qian, general manager of Amundi Bank of China Wealth Management, China’s first foreign-controlled wealth management joint venture, said at the Shanghai Global Asset Management Forum’s internationalization session yesterday.

At the event, the Shanghai Asset Management Association and the French Asset Management Association signed a memorandum of understanding. AFG Chairman Philippe Setbon said that the deep complementarity of China and France in pension finance, green finance, and cross-border asset allocation will offer global investors a more diverse range of asset choices.

China-foreign joint venture wealth management companies are trying to bring Europe’s mature advisory and solutions models to the Chinese market, connecting Chinese household wealth with global markets through multi-layered asset allocation tools, Wang said

While short-term macro uncertainty pressures equity valuations, the core of investing lies in capturing intrinsic value, said Liu Song, president of Neuberger Berman Asia Pacific.

In the future, AI will form two relatively independent ecosystems, one in China and one in the US, Liu Song noted.

Global funds still underweight Chinese assets, Tian Di, fund manager at Fidelity International…

Tian…

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