Investors are increasingly rotating into Chinese technology stocks and diversifying away from the U.S. due to lower valuations, government support, and loose fiscal policy in China, according to UBS fund managers who spoke to Reuters at the World Economic Forum in Davos, Switzerland.
"We like China tech in particular because there’s some success there. There also seems to be government support," said Mark Haefele, chief investment officer of UBS Global Wealth Management.
Haefele noted that clients across the U.S., Europe, and Asia are looking for hedges against the dollar, with growing confidence in China’s tech sector encouraging increased investment in the region.
Ulrike Hoffman-Buchardi, Americas CIO and head of global equities at UBS, identified a broader cyclical backdrop as the main market driver. She explained that fiscal stimulus will benefit all regions, creating opportunities in markets trading at more attractive valuations.
"We are optimistic, but also cognizant of downside risks, in particular in those countries and areas where capital has gone; U.S. of course has been a big recipient of those inflows," Hoffman-Buchardi added.
