- Equity Portfolio Manager
Portugal, Institutional
ChangeThe 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.
Figure 1
Experts
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