Merryn Talks Money Why This Is China’s Year in Markets
Apr 4, 2025
Edward Cole, Head of multi-strategy equities at Man Group, shares insights on the re-emerging viability of China's markets, once deemed 'uninvestable.' He highlights the shift in investor perception towards international opportunities, moving away from the dominant US stocks. Discussion includes the necessity for diversification in light of macroeconomic and geopolitical changes. Cole emphasizes the impact of central bank policies on investments and advocates for a dynamic approach to asset allocation, particularly in a high-inflation environment.
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Questioning US Exceptionalism
- The US equity market's "exceptionalism" is being questioned, prompting flows to other markets.
- Nothing is permanently exceptional or uninvestable; market values must connect to reality.
US Equity Concentration
- US equities are highly concentrated, with a small percentage of constituents holding significant index weight.
- This lack of diversification makes investors vulnerable to style-specific macroeconomic shifts.
Alternatives to US Equities
- Until recently, investors saw the US as the primary source of technological advancements, limiting alternatives.
- DeepSeek and other developments challenge this notion, highlighting China's AI capabilities and potential.