US-China trade war pessimism has created investment opportunities, asset manager Merian Global says
- Firm’s largest investments are in Chinese technology giants Tencent and Alibaba, as well as Ping An Insurance
- Investors are bearish and nervous, which has made equities cheap as an asset class, Nick Payne, Merian Global’s head of global emerging markets, says
As the trade war has intensified and concerns over the global economic outlook have increased in recent months, investors have become too pessimistic and are passing up returns in emerging markets equities, according to asset manager Merian Global Investors.
Nick Payne, head of global emerging markets at Merian Global, said investors are bearish and nervous, which has made equities, as an asset class, cheap because sentiment is poor.
“That’s the time to embrace the inner contrarian and buy, but we know that is often the most psychologically difficult time to buy,” Payne said. “If you buy when people are euphoric, you don’t tend to get great returns. If you buy when people are negative, you get pretty good forward returns.”
The United States and China have been involved in a trade war that has raged for more than a year, with the world’s two biggest economies placing tariffs on hundreds of billions of dollars of each other’s goods.