Top U.K. fund manager Anthony Bolton thinks that China’s economy is better than many realize, and is particularly high on the country’s consumption and services sectors.
“We have been through an extraordinarily volatile year but I believe that when the dust settles and things calm down, investors will focus on relative growth rates they can get in different parts of the world,” Bolton tells FTAdviser.com. “I feel very strongly that this will result in money flowing out of developed markets that have sovereign debt problems and very mediocre prospects over the next few years into the faster growing emerging markets like China.”
Bolton, who compiled one of the best long-term fund management track records ever but has struggled over the past year as Chinese equities have tumbled, thinks the tide should turn in the next year. “The next 12 months should be a defining moment for Chinese investment when investors realize the economy is not about to collapse and the tightening period is over,” he says.
Bolton says China’s growth rate should slow down, but will still remain very attractive relative to other areas of the world. He’s particularly high on the consumption and services areas of the Chinese economy. His concerns include the residential property market, and potential political changes that may occur in the next year-and-a-half. He’s underweight exporters, commodities, infrastructure companies, banks and property companies.