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17 December 2020

Is Asia still the best source of economic growth?

 

There are a number of reasons to be positive about investing in Asia, with an increasing range of investment opportunities, particularly in the equities space, providing investors with exciting opportunities to diversify their portfolios. The growth of the Chinese middle class has helped to fuel demand for more innovative products and services, with domestic companies capitalising as the ruling Communist Party looks to Chinese firms in order to reduce their overseas reliance and create domestic powerhouses that are able to compete with the likes of Amazon and Microsoft.
 
Other nations within the region also look set to capitalise on a number of demographic, socio-economic and geo-political changes. Vietnam, for example, has been identified as a key beneficiary of the US-China trade dispute, helping to increase demand for manufacturing in the country as wages in China continue to rise and the traditionally protectionist Vietnamese government look to open the country up to foreign investment. Traditionally cyclical sectors such as financials and housing, while out of favour in much of the western world, could provide some strong opportunities for UK-based investors to tap into the changing economic and social landscapes across Asia.
 
The future looks even more promising with President-elect Joe Biden’s likely ‘softer touch’ to trade negotiations hopefully providing a tailwind to, in particular, Chinese investments. While investing directly into these markets can prove difficult, collective investments using experienced fund managers who possess strong track records in the region can help navigate any complexities and provide a more ‘boots on the ground’ approach to investing.
 
Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
 
Is Asia still the best source of economic growth?
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