Allianz Global Investors has turned overweight on Chinese equities, driven by strong corporate earnings, a growing need for portfolio diversification, and investment opportunities ranging from artificial intelligence and robotics to energy storage and biomedical innovation, a senior executive said.
"We are overweight now and maybe before we were more neutral," Michael Krautzberger, chief investment officer for public markets at the German asset manager, told China Daily 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 shift took place over roughly the past year through a series of investment decisions, including individual company selections rather than a single adjustment, Krautzberger said.
Outside the financial sector, he said he sees a strong corporate earnings trend, supporting a relatively broad-based overweight position on listed Chinese firms.
The holdings span AI, robotics, automation and autonomous driving, as well as industries benefiting indirectly from AI's expansion, including suppliers of energy and storage components, he added.
Krautzberger also identified opportunities beyond the AI sector.
"If we then discuss chemicals, medicine and medical innovation, those are areas which I think are very promising as well."
That puts the CIO in step with a longer-term buildup of domestic institutional money. Official data showed the national social security fund, basic pension funds, annuity funds and insurance funds made combined net A-share purchases of more than 1.5 trillion yuan ($225 billion) during the two years from September 2024 to September 2026.
Despite intensified fluctuations globally since October, the national social security fund, insurance funds, mutual funds and securities firms have bucked the market downturn and posted net purchases of A shares overall.
The Shanghai Composite Index fell 0.82 percent to close at 3608.1 points on Tuesday, South Korea's Kospi dropped 3.59 percent, while the Nasdaq Composite declined 1.07 percent in its latest close on Monday.
Li Chao, vice-chairman of the CSRC, said at the Global Financial Leaders' Investment Summit in Hong Kong on Tuesday that the commission will make every effort to maintain the stable operation of the capital market.
China will expand the international use of the renminbi and effectively implement monetary policy tools designed to support the capital market, according to a State Council report submitted on Tuesday for deliberation by the Standing Committee of the 14th National People's Congress.
Such efforts are underway as the People's Bank of China — the country's central bank — on Tuesday carried out a 100 billion yuan operation under its swap facility for securities, fund and insurance companies to provide them with liquidity support for stock market investments.
On Monday, the PBOC said it would cut the interest rate on its dedicated re-lending facility for share buybacks and stake increases, while the CSRC vowed to encourage more major index constituents and leading tech companies to leverage the facility for buybacks and stake increases.
Krautzberger's comments also come as some foreign investors take a fresh look at their exposure to Chinese shares. A recent Bank of America analysis of 2,767 global funds — reported by the South China Morning Post — found that global active long-only funds had, on average, moved from underweight to benchmark-neutral on Chinese equities since June.
He attributed the renewed interest to a combination of diversification needs and corporate innovation, adding that global equity indices are heavily concentrated in the United States, while Chinese companies offer competitive capabilities in areas such as AI models, autonomous driving and robotics.
Diversification across regions and asset classes is increasingly important as equity returns fluctuate with enthusiasm and setbacks surrounding AI, he said, adding that many Asian assets offer relatively high expected returns and low correlations with traditional Western markets, which can make a slightly higher standalone volatility acceptable.
China's energy infrastructure, scientific talent and vast market provide advantages for innovation, with opportunities increasingly extending to small and medium-sized companies, he said.
With China stepping up efforts to nurture first-class investment institutions, Krautzberger highlighted a long-term perspective, a proven investment record and experience navigating crises as key attributes of first-class investment institutions, alongside international expertise and the ability to adapt to technological change in the AI era.
Wang Yubo contributed to this story.
Contact the writers at zhoulanxv@chinadaily.com.cn
