BY KIM LEE, SENIOR FUND MANAGER
It was a quiet month for Asian equity markets. With no sign of the current trade war between the US and China abating, investors remain cautious, aware that there is the potential for further tariffs to be implemented.
The uncertainty surrounding the impending trade war coupled with the recent weakness in Chinese economic data means the portfolio has retained a defensive set-up, holding a larger than normal proportion of cash. However, despite this, we believe China is well-prepared to counter any further action from President Trump, with further policy easing also an option for Xi Jinping and his government. This, alongside the ‘Made in China 2025’ policy, should provide fundamental support to the domestic economy but we intend on waiting until the macroeconomic position becomes clearer before putting this cash back to work in the market.
Within the portfolio certain stocks, such as Hong Kong-listed hotpot provider XiabuXiabu, continue to perform strongly and technology continues to remain a growth area, with companies moving up the value chain. Elsewhere in Asia Pacific, although the domestic outlook for Australia is mixed it remains a bottom-up market with number of stock picking opportunities. For example, Qantas Airways and Macquarie continue to be active weights in the portfolio.
Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Currency fluctuations can also affect performance. Due to the underlying assets held, the price of the Fund is classed as having above average to high volatility.
The information contained in this document is provided for use by investment professionals and is not for onward distribution to, or to be relied upon by, retail investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at www.canadalifeinvestments.com.
Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
CLI01266 Expiry on 15 October 2018