U.S. China trade tensions have sparked market caution among top fund managers. Mark Mobius, Cathie Wood, and eight others have shared their top picks and predictions as the tensions escalate, according to Bloomberg. Here are their sentiments:
- Companies in China that are dependent on what is happening locally and not on U.S. trade are top picks. China will experience 5% to 6% growth, and areas such as healthcare, education, and technology will be ideal ̶ Mark Mobius, Partner, and co-founder of Mobius Capital Partners.
- Prospects are better for Chinese companies oriented towards internal growth as the economy has evolved to one driven by domestic demand. Opportunities exist for Chinese technology firms trying to be an alternative source for IP and equipment ̶ Andy Rothman, Investment Strategist at Matthews International Capital Management LLC.
- Chinese equity market presents an opportunity but needs to balance exposure with the Asian high yield and Chinese Yuan relative to the dollar ̶ Kelvin Tay, Chief Investment Officer at UBS Global Wealth Management.
- Cash and recession-proof stocks such as cybersecurity are ideal as possible military skirmishes brought by the current tensions could drive equity markets to crashes since markets are already at elevated valuation levels ̶ Kok Hoi Wong, Founder and Chief Investment Officer of APS Asset Management.
- The U.S. won’t fall-out with China in terms of the tech war but will continue to sabre-rattle. It is part of election campaigning ̶ Cathie Wood, CEO and Chief Investment Officer at ARK Invest.
- Present signs point towards the deterioration of U.S.-China relations. Should the situation escalate, diversifiers such as long Japanese yen will perform strongly, and trades should target affected assets and companies ̶ James McCann, Senior Global Economist, Aberdeen Standard Investments.
- The trade war is unlikely to improve, and the best picks are technology-supplying in China, including local suppliers based in Shanghai and other major cities ̶ John Lau, Head of Asia Equities at SET Investments.
- Asia real estate and infrastructure will be the eventual winners of the trade war, but rates must stay low ̶ Henry McVey, Heady of Global Macro, KKR & Co.
- Consumer-facing, service-oriented, and technology-enabled Chinese investments to remain bullish and present an opportunity to invest ̶ Fred Hu, Founder of Primavera and former Goldman Sachs head In Greater China.
- Both the U.S. and China are prioritizing economic growth despite tensions and stock crash is unlikely. Chinese equities are an opportunity outside those affected by tariff increases and sanctions ̶ Mike Shiao, Chief Investment Officer for Asia ex-Japan at Invesco.
