As next gen investors and principal wealth owners think about meeting both near- and long-term wealth management challenges, they should consider three core pillars of building a lasting family legacy: shared values, strong wealth governance, and a clear, long-term investment policy.
No. Despite the recent spate of lockdowns in China, we still anticipate some form of easing of the current zero-COVID policy and increased support for the economy following the Party Congress in October.
Equity long/short investing is one of the most widely adopted strategies by hedge fund managers in Asia. Its importance has increased over time, and we believe that this strategy can play a key role within a global hedge fund portfolio. There have been several positive developments in recent years that build the case for investors to allocate to the strategy, including better market access, continued alpha opportunity, and a greater talent pool.
Given Russia’s invasion of Ukraine, concerns that China might decide to invade Taiwan are rising. But China is not Russia, and Taiwan is not Ukraine. For China to unilaterally break the status quo and risk a failed invasion and inflict economic pain on the population would be extremely destabilizing for a party that puts domestic stability above everything else. And given the current state of the Chinese economy and China’s vulnerability to US tech sanctions and the USD banking system, China is unlikely to invade Taiwan any time soon.
We don’t think so, as the markets are pricing in more severe conditions than we believe are warranted.
New Zealand’s COVID-19 containment strategy served the economy well during the early days of the pandemic. However, New Zealand equities and bonds suffered in 2021 as growth slowed to a halt late in the year due to lockdown measures and inflation moved higher due to labour market constraints. Heading into 2022, New Zealand authorities have pivoted the strategy from zero–COVID-19 to minimisation and protection, while still embarking on a monetary policy tightening cycle. Balancing both strategies will be key to supporting New Zealand’s economic growth in 2022.
China’s equity markets have lagged global equities sharply thus far in 2021 in the face of a regulatory crackdown. We expect Chinese equities, particularly China onshore A-shares, to outperform global equities in 2022.
Global capital markets were volatile during third quarter 2021. In September, equity markets gave back most of the gains made earlier in the quarter. Markets are reacting to concerning economic and inflation data, geopolitical risks, and potential central bank tightening. Core hedge fund strategies were mixed but relatively flat during the third quarter.
Yes. In recent weeks, several Chinese property developers have defaulted, and spreads on Chinese high-yield bonds have widened roughly 600 basis points (bps), taking their year-to-date loss to 18%.
As the second largest economy in the world, China remains an important destination for global investor capital. Yet, the pace and scope of China’s regulatory crackdown are causing concern. In this edition of VantagePoint, we review the nature of regulatory developments and their impact on the investment opportunity set. We believe that dedicated, strategic allocations to Chinese assets are still warranted. Investors should carefully consider their sector exposure and evaluate managers’ capabilities in the current regulatory and geopolitical environment.