A U.S. Adjusts the Chinese flag near the flag.
Ng Han Guan | AFP | Getty Images
SINGAPORE – Investors need to allocate more of their portfolios to China, as “geopolitical diversification” is becoming a more critical consideration in the coming years, according to an investment strategist.
Paul Colwell, head of portfolio group for insurance broker Willis Towers Watson’s Asia advisory, said investors globally currently invest less than 5% of their stock in China.
According to a report by Venice Towers Watson, panel funds and endowments have an allocation of %% to %% for China, citing a recent survey by data analytics company Greenwich Associates.
According to the index provider, Chinese A-shares account for 5.1% of the MSCI Emerging Markets Index by 2020, or the weight of stocks traded on the mainland.
“We just don’t think it’s enough to be fully prepared for the new world order,” Colwell told CNBC’s Squawk AsiaX Asia on Monday. He added that they should increase their allocation to Chinese stocks by 20% in the next decade.
“Investors need to allocate more investment portfolios to China, in the new world order, in order to properly place their portfolios for the post-Covid world,” said Colwell. “Geopolitical diversification will become a more important portfolio … it will be taken into account in the coming years.”
If you believe that the world is moving beyond globalization, if you believe that the world’s major economies, especially the U.S. And if China separates from each other, we believe that China has a strong case for allocation.
Paul Colwell
Willis Towers Watson, head of the Advisory Portfolio Group for Asia
China has been embroiled in trade disputes with the US, Europe, Australia, Australia and India this year.
From 2018, Beijing U.S. Is in trade dispute with, which resulted in a “one-phase” trade agreement earlier this year. From phone maker Huawei to the video-sharing app Ticket OK – and Washington Shing is increasingly targeting Chinese tech giants, however, tensions continue to rise and move into the tech space.
Tensions between China and Australia have also intensified in recent months. It came after Canberra called for a global investigation into the origin of the coronavirus.
The move angered Beijing, which curtailed trade on Australian Australian imports – the latest Australian anti-dumping tariff on bottled wine imports of up to 212%, which China announced late on Friday.
Regarding trade tensions, Colwell told CNBC that they would only create “a lot of noise” and volatility in the short-term market.
However, he said: “If you believe that the world is moving beyond globalization, if you believe that the world’s major economies, especially the US and China, will be separated from each other, we believe that one for allocation. That’s a strong case. If you don’t expect more from China and you. “
“The China A-stock market is relatively less co-related to developed markets. Monetary policy, driven by different approaches to economic policy, is a fundamentally different version of the Chinese economy compared to other major geographies.”
Therefore, the “resilience, strength” of global divisions allocated to Chinese stocks will increase, he said.
.
