Fund managers turn to financials, tech as trade worries rise
NEW YORK The rising tensions over global trade are prompting international fund managers to look for companies that can emerge as winners.
Fund managers from firms such as AllianceBernstein, Causeway Capital Management and Janus Henderson are adding to positions in companies ranging from Italy's largest bank to China's largest e-commerce company, hoping to avoid the fallout from a global trade war.
Fund managers are now looking fora strong domestic business that would not be significantly affected by import tariffs, or a dominant market position, or intellectual property that would prompt customers to continue to buy its goods regardless of additional taxes.
"The impact of a tariff is becoming a bigger factor in our decision-making," said Mr George Maris, a portfolio manager of the US$2.2 billion (S$3b) Janus Henderson Global Select fund. Mr Maris has increased his position in companies like Chinese e-commerce giant Alibab.
US President Donald Trump said he was pushing ahead with tariffs on US$50 billion of Chinese imports on Friday, and the simmering trade war between the world's two largest economies may yet ignite.
Mr Sammy Suzuki, a co-portfolio manager of the US$77 million AB International Strategic Core fund, said his fund is focusing on what he calls the "enablers", back-end tech firms that do not trade at as high valuations as companies like Amazon.com and Netflix.
Mr Suzuki has also been increasing his position in European luxury goods makers such as Italian apparel company Moncler SpA and British alcoholic beverage company Diageo Plc. Both make products that should not be significantly affected by rising global trade costs, he said.- REUTERS
Get The New Paper on your phone with the free TNP app. Download from the Apple App Store or Google Play Store now
