BlackRock takes safe investment route into Asia
Healthcare industries in Asia are attractive to the US investor and it is putting money in the Western firms that do business in the region
BlackRock is looking to increase its weighting in healthcare firms in the United States and Europe that have exposure to the Asian market, as a safer way to invest in the Asian growth story, said a star fund manager at the world's biggest asset manager.
Even though Asian equities were trading at low valuations, they were still not attractive enough to warrant direct investments, Dan Chamby, managing director at BlackRock and portfolio manager of the BlackRock Global Allocation Fund, said.
Some high-beta Asian names were appealing, such as Malaysian hospital operator IHH Healthcare, one of Asia's biggest, and China's state-owned drug distributor Sinopharm, said Chamby. But rising labour costs and vague corporate governance are key hurdles keeping the fund out of many Asian equities.
Beta is a measure of a stock's volatility in relation to the market, and a high-beta stock is one that moves by bigger margins than movements in the overall market.
"Wages are rising and this is one of the reasons we are probably going to prefer to exploit growth in the emerging world through more developed market equities," Chamby said.
The BlackRock Global Allocation Fund had assets under management of US$53.7 billion as of September 30, and has seen the weighting of its Asia-Pacific ex-Japan assets fall to 6 per cent in the third quarter from 7 per cent a quarter earlier.