China’s tech play, U.S. high yield & equities
Markets are seeing a tepid start to trade in Europe, as investors digest the latest developments in the Iran war. Anticipation is also building ahead of major earnings this week, including five of the “Magnificent Seven,” as well as rate decisions from the Federal Reserve, the Bank of England, the ECB and the Bank of Japan. Here are three investment strategies we heard out of CNBC’s London and Singapore studios on Monday to help navigate the noise. China’s tech play China’s Shanghai Composite and Shenzhen Composite have rebounded in recent weeks, as one of the world’s biggest economies looks to navigate the fallout from war in Iran. Stefan Hofer, chief investment strategist for Asia-Pacific at LGT Private Banking, said the stability of the renminbi throughout the Middle East crisis has reminded investors of the country’s fundamentals, and highlighted one country’s tech sector, adding this had “nothing to do with Trump tariffs and the energy price shock.” “There are pockets within the Chinese equity market that we think investors should not be ignoring, and tech is definitely one of them,” Hofer added. U.S. high yield This week’s central bank rate decisions come amid fears of surging inflation due to the oil supply shock, and will have an impact on how yields are traded. Sarah Harrison, senior portfolio manager at Allspring Global Investments, said she is very cautious on Europe, adding that she has rotated out of European credit and investment grade to buy U.S. investment grade and U.S. high-yield. Harrison added that Allspring Global Investments has taken some risk in its multi-sector portfolios, saying the group is “looking to take advantage of short-term dislocations” in the gilt market. Own ‘as much equities as you can’ Mathias Heim, CIO at Bellecapital, said investors should own “as much equities as you can,” describing it as a way to protect against inflation over the medium to long-term. Heim added that the obvious opportunity lies within power semiconductors, which he said, “have the ability to provide meaningful products to the data centre builder.”
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