“After the correction in September and October on concerns of global growth, the market is starting to reverse,” Liang said.
Within Asia, she likes Hong Kong, China, India and Indonesian equities. China stocks are particularly attractive due to low valuations.
“The easing of major global central banks [in Japan, the EU and UK], plus an accommodative stance that China PBoC [the central bank] is likely to take, should benefit the fund inflows to Asian risky assets.”
Last month, the bank added the Blackrock New Energy Fund. Liang’s team believes the correction in oil prices overshot, taking “new energy” stocks with it.
“I suggest taking this recent downturn to accumulate the fund. We’re expecting a decent medium term return for the new energy sector.”
Exposure to the Invesco European Small Cap Fund has been reduced due to concerns about weak economic data from Germany and the potential for a triple dip recession in Europe, she said.
The Invesco Global Leisure Fund was recently added to the bank’s selection list because Liang believes the consumer discretionary sector has fallen behind the growth in the technology and health care sectors.
“The US economy and wages are improving, while the housing market is stable, and consumer discretionary stocks should be able to do some catch up with the overall US equities performance in the next few months,” Liang said.
In high yield, she likes some global funds, the China property sector, US dollar bonds and Greater China bonds. The bank recently added the Value Partners Asian High Yield Bond Fund. She said Asian high yield is at a discount compared to global products.
China-specific credit is also attractive and Liang is comfortable with the quality names of the China property fixed income papers.
“It looks clear that China will become supportive of the domestic property sector going forward.”
