Business / Markets

Be patient with the Chinese market, says investment veteran

By Dai Tian ( Updated: 2016-01-21 13:32

My advice to any client is to diversify your risk and understand what you are investing and invest in the long run, making sure you are patient.

Q: What will be Northern Trust's next move in the region?

Potter: We are happy with our business in China, and will stay focused on providing services for large institutional investors, and look for opportunities to expand our presence over the next 5 to 10 years.

Currently, the company manages over $875 billion assets and the vast majority is for US clients, while $180 billion is for large foreign entities. We see increasing investments in the non-US markets.

Northern Trust is ranked one of the top four passive managers in the world, with $500 billion assets managed in passive strategies. We have devised a whole series of sophisticated risk factor models overlooking underlying characteristics of the securities. A number of our products focus on companies of highest quality that have strong balance sheets, good liquidity and returns to capital as well as to shareholders.

The company also combines the quality with ESG (Environmental, Social and Governance) screening, focusing on sustainable companies that manage in a transparent way and are socially responsible for employees and shareholders.

Long-term investors are looking at cow-carbon emission and ESG investing as important criteria in their portfolio. And because of that, a lot of money is flowing to stocks that have strong ESG characteristics. Those stocks are likely to outperform others based on the market demand and expectation. Chinese institutional market is starting to pay attention to it too. It's well in line with the government's pledge for transparency and managing carbon footprint over the time.

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