Global Active Long-Only Funds Shift Allocation to Chinese Equities Since June
A Bank of America analysis of 2,767 global funds indicates that average allocations to Chinese equities have moved to benchmark-neutral from underweight since June, ending a four-year trend. Other firms have also noted opportunities in Chinese markets.
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Based on reporting by South China Morning Post:
According to a recent analysis by Bank of America examining 2,767 global active long-only funds, the average allocation to Chinese equities has increased to a benchmark-neutral level from a previously underweight position starting in June. This shift concludes a four-year period of underweight positioning, with the funds under review managing US$562 billion in Chinese stocks, the bank stated.
In related commentary, BlackRock's fourth-quarter global outlook, released in September, maintained a neutral stance on Chinese equities but identified potential in physical AI. Furthermore, UBS Asset Management stated in a report issued on October 1 that China presented itself as a "key opportunity," pointing to appealing valuations within specific areas such as advanced manufacturing, AI, and technology.
Kenny Ng, a strategist at Everbright Securities International, commented that global investors are expected to continue focusing on Chinese assets. Ng noted that valuations, especially in Hong Kong, are currently low, even as external uncertainties persist at elevated levels.
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