Executives see long-term value in Chinese stocks

China's growing capacity for innovation and the diversification benefits of its equities have prompted some major global asset managers to increase their holdings of Chinese assets amid heightened global volatility, said industry executives.

They made the remarks during a recent forum in Beijing hosted by the China Securities Regulatory Commission and organized by the Asset Management Association of China as part of the Annual Conference of Financial Street Forum 2026.

The forum offered insights into and support for the fund industry to accelerate the building of first-class investment institutions and for investors to seize new opportunities in China, according to Shi Zhenqiang, executive vice-chairman of the Asset Management Association of China.

Jason Windsor, CEO of British investment company Aberdeen Group plc, said at the forum: "China is not simply another allocation within an emerging-market benchmark. It is a critical part of how global investors think about the future."

China is central to several forces transforming the global economy, including advanced manufacturing, artificial intelligence, digitalization, energy transition and healthcare, with its capital market offering diversification value to global portfolios, he said.

As in every major market, volatility will remain a part of investing in China, Windsor said, adding that "the discipline is to separate temporary changes in sentiment from lasting changes in fundamentals".

Thierry Ancona, vice-chair of Amundi AM, said the French asset manager has increased allocation to Chinese financial assets since September 2024, as the macroeconomic outlook improved while China's breakthroughs in AI and other technologies attracted more global interest.

"This is especially more visible among our emerging-market and Asian funds, where we are overweight on China," Ancona said at the forum, adding that some of the company's global funds remain underweight although it has significantly reduced the underweight positions.

Allianz Global Investors, a German asset manager, said it is overweight on Chinese equities due to strong corporate earnings and investment opportunities spanning sectors from AI, robotics and automation to energy storage and medical innovation.

"We are overweight now. Maybe, previously we were more neutral," Michael Krautzberger, chief investment officer for public markets at Allianz Global Investors, told China Daily on the sidelines of the forum.

The comments came amid recent volatile trading in global equities as investors reassess the outlook for inflation and interest rates as well as the returns on AI investment. In Asia, the benchmark Shanghai Composite Index closed at 3,697.52 points on Monday, up 0.19 percent; South Korea's Kospi shed 1.46 percent; and Japan's Nikkei dropped 0.8 percent.

Travis Spence, managing director and global head of exchange-traded funds at JPMorgan Asset Management, noted at the forum that China offers long-term opportunities.

While growth in sectors such as property, fixed-asset investment and consumption continues to face pressures, AI-related industries, high-end manufacturing and exports have maintained resilient expansion in China, Spence said.

The uneven performance across sectors in China creates significant opportunities for active asset managers to identify sources of portfolio returns, particularly amid heightened volatility globally driven by the AI revolution and higher interest rates, he added.

Active management involves drawing on an institution's investment and research ability to select investments with the aim of outperforming a benchmark.

Spence's views found echoes in China's accelerated efforts to pursue high-quality development of its fund industry, seeking to shift the industry's focus from growth in scale toward delivering best investor returns, with a coordinated development of active funds and passive funds.

Liu Xiaoyan, chairperson of the Asset Management Association of China, said at the forum that the core of a first-class investment institution is not merely about expanding its scale or increasing the variety of its products.

"The key lies in having the ability to create long-term value, generating long-term returns for investors, providing patient capital to the real economy and adding stability to the capital market," she said.

Last week, the China Securities Regulatory Commission approved the registration of the first group of 18 actively managed ETFs, supporting the development of innovative fund products and bringing additional capital into the market.

Jason Yu, CEO for Hong Kong and wealth lead for Asia at Schroders, welcomed the development, saying that active ETFs could broaden clients' investment choices and provide additional tools for portfolio construction and risk management.

Wang Yubo and Zhuang Qiange contributed to this story.