Fidelity, Invesco prepare to dive back into China after sell-off erases US$1.6 trillion in stock valuation
- Global fund managers are calling time on this year’s relentless sell-off in Chinese assets, saying the sell-off has run its course
- Bullish sentiment is creeping back in, without the euphoria that swept Wall Street a year ago
“We are looking to increase our exposure in a measured manner,” Wang, who helps manage the US$1.5 billion Global Thematic Opportunities Fund, said in an interview. “It has become clearer to investors that economic growth is once again firmly a policy priority.”
Wang is among a growing band of global fund managers who are calling time on this year’s relentless sell-off in Chinese assets, which has seen US$1.6 trillion wiped off mainland stocks since early February. The excessive pessimism that hammered everything from stocks and the yuan to corporate bonds has run its course, they say, paving the way for a market turnaround as policymakers finally take firmer action to revive the economy.
Recent gains in asset prices have emboldened such views. The yuan is headed for its best month of the year after rebounding from a 16-year low against the dollar while a Bloomberg gauge of Chinese investment grade credit is at its highest in 20 months. The Hang Seng China Enterprises Index is set for the smallest monthly drop since July.