Senior Dialogue | Vincent Mortier, Chief Investment Officer of Oriental Huili Asset Management: China has bright prospects and will further increase holdings and investment

2023/5

Three main points

Oriental Huili Asset ManagementPositiveGradually increasing China's asset allocation will continue to accelerate this year

Compared to Western markets, they are still more optimistic about emerging markets overall, and are increasing their holdings in India and Indonesia

It is predicted that the US economy will not grow next year, but there is no concern about the possibility of a US debt default

As the largest asset management company in Europe, Dongfang Huili Asset Management (hereinafter referred to as “Oriental Huili”) manages2.1Trillion-euro assets.Chief Investment Officer of Oriental HuiliVincent MortierIt said that Orient Huili is gradually withdrawing US assets and shifting to China. Because China's future economic prospects are bright,possessionBetter valuations and a more moderate inflation outlook.

Vincent Mortier

Chief Investment Officer of Dongfanghui Asset Management

“We are shifting asset management to China. China's economic outlook is dynamic and full of opportunities.”

Investment focus will focus on the East

In an interview with the Financial Times, Vincent Mortier said, “In terms of asset allocation, we have clearly moved from the West to the East.” He predicts that the US economy will not grow next year.Meanwhile, China, India, and Indonesia will grow by 5% to 6%, respectively.

Over the past 12 months, Oriental Huili has been gradually increasing its asset allocation in China and India, and has stepped up the pace this year.

Vincent Mortier is particularly optimistic about investment opportunities in some Chinese corporate bonds. He believes that foreign investors have been selling off the entire market while ignoring the quality of distribution to pedestrians in the region.He also mentioned that there are many really high-quality companies in China with potential and investment value.

Despite recent fluctuations in the Chinese stock market, Oriental Huili is still optimistic about China. Vincent Mortier said that the “risk” of China's reputable, high-quality companies is overestimated by the market, while being “too optimistic” about the US market under the shadow of the economic recession.

Stay optimistic about China's prospects

Vincent MortierVery optimistic about the Chinese market, number oneChina's economy grew year on year in the first quarter4.5%, better than expected, but industrial output increased year on year last month5.6%, growth ratethanUnfavourable expectations。MortiervoicedInvestors don't need to worry too much because the way data is generated has changed, so they should pay more attention to the actual situation in the market.

He also mentioned that the US market is expecting a “Goldilocks” (Goldilocks) scenario. Investors expect lower inflation, lower interest rates, higher returns, and a soft landing, but as the financial situation tightens further, the probability of such a scenario is getting smaller and smaller.

There are more emerging markets than Western markets

According to the Federal Reserve's quarterly “Senior Loan Officials Opinion Survey”, 46% of US banks plan to raise their benchmark interest rate on loans due to concerns about loan losses and deposit flight. Meanwhile, hourly wages increased 4.4% year over year in April, which may put upward pressure on inflation.

Vincent Mortier believes that the inflation rate in the US and Europe will stabilize at around 3% to 4% in the next few years, but since it takes some time for monetary policy to work, there will be fluctuations, which will make the work of the Fed more difficult.

Referring to the treasury debt issue, Vincent Mortier believes that treasury bonds are still safe, and investors don't need to worry about the possibility of US debt default.

But no matter what, Vincent Mortier still favors emerging markets over Western markets,It is also increasing its holdings in India and Indonesia because, like China, their economic growth is becoming less dependent on exports.

Disclaimers

This article shall not be construed as an offer or invitation to buy or sell any financial product, including but not limited to securities, fund shares, or the provision of financial services.

The views expressed herein and/or the companies, financial products, and financial services mentioned should not be considered advice on Oriental Huiliang's asset management.

All opinions and speculations in this article are subject to change at any time without prior notice.

To the extent permitted by applicable laws, rules, codes and guidelines, Oriental Huili Asset Management and its related companies and board members, supervisory board members and all employees of these companies are not responsible for any direct or indirect losses arising from the use of data, opinions, and predictions contained in this document.

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The purpose of writing this article is to provide general information only. It does not mean that reference has been made to the individual investment goals, financial conditions and individual needs of individual persons who may receive this article.

Prospective investors should seek independent advice on the appropriateness and suitability of individual investment projects or other factors.

Investors should not rely on this article alone to make investment decisions.

Investing involves risk. The past performance of markets, fund managers, and investments, and predictions of economic markets, stock markets, bonds, or economic trends in which any fund invests are not a basis for future performance.

The return on investment may decrease or increase the total value of the investment due to exchange rate fluctuations.

Investments may fall or rise. Investors must read sales documents to obtain more detailed information, particularly statements about investment risks.

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Oriental Huili Asset Management has the final right to interpret this statement and has the right to change or adjust the content of this statement from time to time.

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