The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
The short answer: Yes, in our view. China equity is clearly out of favor with global investors these days, but if market history is any guide, it is at such times that shrewd allocators should take a closer look.
Figure 1 shows the rolling 12-month return differential between US and Chinese equities. Given China’s sharp underperformance in recent years, we think today’s valuation level may offer an attractive entry point. In prior periods where China equity has lagged by this much, it has subsequently bounced back strongly.
While longer-term challenges remain that could structurally lower China’s rate of economic growth going forward, we believe a short-term buying opportunity is now available.
Experts
The power of local perspective: the long and short of European equity investing
Continue readingImpact measurement and management: addressing key challenges
Continue readingURL References
Related Insights
Stay up to date with the latest market insights and our point of view.
Weekly Market Update
What do you need to know about the markets this week? Tune in to Paul Skinner's weekly market update for the lowdown on where the markets are and what investors should keep their eye on this week.
The power of local perspective: the long and short of European equity investing
Dirk Enderlein and Boris Kergall explain why, in their view, the structural changes impacting European equity markets offer active long/short investors a rich source of potential return and diversification.
Impact measurement and management: addressing key challenges
Our IMM practice leader describes common impact investing challenges and suggests ways to overcome them.
Quality growth — a less volatile sweet spot?
Growth stocks can be volatile, especially when companies fail to meet expectations. However, high-quality growth companies can help mitigate downside risk while still offering potential for long-term outperformance. How can investors find the sweet spot?
Unlocking the full value potential of stewardship
Yolanda Courtines and Alex Davis examine how corporate stewardship can be a source of value and delve into what investors can do practically to maximise its full potential.LDI Team Chair Amy Trainor explains why she believes a pension risk transfer may, in many cases, not be the best choice for fully funded plans from a cost/benefit standpoint.
Decoding impact expectations: best practices for impact investors and companies
We share three recommendations each for impact investors and companies to help them better understand and manage each other's expectations.
Strong fundamentals, attractive valuations: Why the time may be right for active biotech investing
From solid fundamentals to supportive macro conditions, learn why our biotech experts believe the industry may be ready to run.
Navigating AI resource demands: Strategies for sustainable data center operations
AI's growing computational demands are raising critical questions about energy efficiency and water-resource management. We delve into strategies for enhancing sustainable data center operations, highlighting the importance of proactive resource stewardship.
What is “the economic cycle,” anyway?
See why the relationship between asset prices and the economic cycle is more complex than you might think, why a US recession is unlikely, and what a more dovish Fed could mean for the US and global markets.
Japan’s factory automation sector: Poised for a significant upturn?
Global Industry Analyst Takuma Kamimura explains why he believes we’re on the verge of a multiyear cyclical upturn in the factory automation sector and why he sees a compelling outlook for select Japanese companies in particular.
US election special: which investment themes win at the polls?
The upcoming US election could be one of the most momentous in recent history. How could the result affect different investment themes? Our thematic team investigate the potential implications for investors.
URL References
Related Insights
