Name these three companies! Fund manager: Investors should consider positioning in high-quality Chinese companies.
25/12/2024
GMT Eight
Jordan Cvetanovski, Chairman and Chief Investment Officer of Pella Funds Management, stated that investors should consider high-quality companies in China and Europe, which have superior valuations. Despite the complex geopolitical situation the market may face in the future, these companies may still perform very well.
Cvetanovski mentioned that over the past two to three months, Pella Funds has been seeking opportunities in China and has increased their investment allocation in the region to "over 10%". The company's high emphasis on valuation has led them to look beyond the United States to regions such as Europe and Asia.
He noted that China is currently implementing more fiscal stimulus measures to boost the economy, which is expected to provide more momentum for the institution's investments in China. Even if the authorities do not implement these stimulus measures, the selected investment targets by Pella Funds are expected to perform well in market fluctuations.
Among the Chinese companies that Cvetanovski is optimistic about are Midea Group Co., Ltd, HKEX, and AIA, all listed in Hong Kong. He believes that any stimulus measures introduced by the Chinese government will greatly benefit these companies as they are undervalued and have low holdings by global asset managers.
Cvetanovski also mentioned that Pella Funds has been a loyal long holder of TSMC for many years, with a primary interest in the field of artificial intelligence.
In addition to being bullish on quality Chinese stocks, Cvetanovski also sees great opportunities for Pella Funds in Europe due to the cautious attitude of global traders towards investing in the region.
He highlighted Schneider Electric, a French power equipment manufacturer, as an example. Despite recent political instability in France, the company's expected growth rate and profit margin have been increasing.
Pella Funds recently invested in Spirax Group, a British engineering company, which is expected to benefit from the rebound in mining capital expenditure.
Cvetanovski emphasized that these companies will benefit from China's fiscal stimulus policies but may not necessarily rely on them. The current stock prices of these companies are relatively cheap, and their performance is still growing. He pointed out that the cost they pay for these investments is reasonable, unlike some valuation in the US market that they find difficult to justify at the moment.