What’s Going On Here?Investors in Asia revealed their investment strategies ahead of next month’s US presidential election in a new survey – and, uh, lots of them are avoiding the country altogether. Awkward. What Does This Mean?The 30 big-name investors surveyed were split on the election outcome, but their investment choices suggested they’re not convinced either way: the majority are buying into “safe havens” like gold, government bonds, the US dollar, and the Japanese yen. A third of them also reckon it’s time to ditch expensive tech stocks in favor of beaten-up sectors like leisure and banks, as well as “defensive” healthcare and consumer staples stocks. One opportunity that wasn’t high on their list, meanwhile, was “alternative investments” like real estate or increasingly popular environmental, social, and governance-focused funds – which tallies with Asian investors’ reputation for being particularly risk averse. Why Should I Care?For markets: Tech-nical analysis.
Asian investors might be gun-shy when it comes to America’s tech stocks, but they seem pretty gung-ho about China’s. That could be because Chinese tech stocks are both cheaper than their US peers compared to their earnings and less at risk of profit-limiting regulation (tweet this). In fact, investors are generally pretty optimistic about Asia as a whole: now that big parts are past the pandemic and China’s growing again, its stocks are in a good position to outperform those in the US well into 2021.
The bigger picture: China vs. India.
The surveyed investors agreed the election’s winner would have knock-on effects across Asia, but said those effects would differ depending who it was. A Democratic Party victory would, they thought, result in a more moderate approach to the ongoing trade war, which might boost China and its closest trading partners (think Japan and South Korea). A Republican Party victory, meanwhile, might benefit India more: investors are expecting the US to help galvanize the country in a bid to reduce China’s influence in Asia. | 