‘180-degree flip’ sees global investors turn to China for diversification: Pimco president
Global investors are turning to China again in search of alternatives to crowded US asset markets, with Pimco seeing Chinese bonds as one of the safest ways to diversify portfolios after sentiment towards the world’s second-largest economy “flipped 180 degrees”. The US-based asset manager, which oversaw more than US$2 trillion in assets by the end of June, had been pointing its clients,…
Global investors are increasingly looking to China as a way to diversify their portfolios away from US-dominated markets, according to Pimco president Christian Stracke. The US-based asset manager had been recommending Chinese offshore bonds to clients seeking diversification from US concentrations, particularly those outside the United States.
Stracke explained that China's offshore bond market is "by far the least correlated and the most stable" among emerging market alternatives, providing a true risk-off diversification. Chinese bonds could outperform other assets in a global risk-off scenario, despite relatively low yields, due to China's weak inflationary pressures.
The shift in investor sentiment towards China is evident, with people's bank of China governor Pan Gongsheng noting China's financial market depth and breadth as important opportunities for overseas institutions seeking diversified allocations. In recent years, foreign investors have shown renewed interest in China, driven by the country's export strength and advancements in AI, robotics, and automation.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
