Top Australian allocators have conceded it is time to rethink the underweight positions to China which have characterised their portfolios, as the Asian superpower’s intensifying AI race with the US creates attractive opportunities.
The $41 billion University of Texas Investment Management has been investing in China since 2007 and its CIO, Britt Harris says it “must be taken seriously”. Presenting at the endowment's board meeting, co-CIO of Bridgewater, Bob Prince, agreed, saying “China is too big to avoid”.
International pensions adviser at PRIME bv, Peter Kraneveld, looks at how different China scenarios could impact portfolios.
Many developing nations are proving resilient in the face of market shocks, thanks in part to improvements to institutional domestic capital markets and more sophisticated legislative frameworks.
The chair of the International Forum of Sovereign Wealth Funds, Adrian Orr, says entities such as the IMF could pave the way for large-scale investment in emerging-market infrastructure projects.
From a strategic asset allocation point of view, AustralianSuper is one of the most aggressive investors in emerging markets, particularly Asia. About a quarter of the $43-billion fund is in international equities, and nearly half of that is in emerging markets. Equities is the vehicle for AustralianSuper’s emerging market exposure because growth remains the reason
The changing nature and openness of emerging market financial systems mean that constant assessment of the environment is necessary. MSCI is currently considering whether to increase the allocation of China’s weight in the emerging market index to include the nation’s A shares. (Concurrently MSCI Korea and MSCI Taiwan Indices remain under review for a potential
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