Chinese Mainland Stocks to Outperform RoW Over Next Decade, Vanguard Says
Xu Wei
DATE:  Jan 09 2020
/ SOURCE:  yicai
Chinese Mainland Stocks to Outperform RoW Over Next Decade, Vanguard Says Chinese Mainland Stocks to Outperform RoW Over Next Decade, Vanguard Says

(Yicai Global) Jan. 9 -- Stock markets on the Chinese mainland will provide the world's highest annualized returns over the next decade, The Paper cited a Vanguard executive as saying.

The Shanghai and Shenzhen bourses will return between 7.5 percent and 9.5 percent a year over the next 10 years, outpacing American markets by a wide margin, Wang Qian, chief economist of Vanguard Asia-Pacific, said at the 2020 Global Economic and Market Outlook Conference yesterday. He expects US stocks to return between 3.5 percent and 5.5 percent.

Long term there is vast uncertainty in the Chinese economy, Wang added, but predicted that policymakers will continue to implement targeted stimulus measures to prevent the nation from quickly slipping to a growth rate of less than 5 percent. Beijing forecast economic expansion of between 6 percent and 6.5 percent last year, compared with a 28-year low of 6.6 percent in 2018.

Global economic growth, inflation and interest rates are all likely to keep declining and so Vanguard is cautious about the prospects of the global stock market over the next decade, he continued, saying he predicts dollar-denominated returns to average between 4.5 percent and 6.5 percent.

China's mainland markets are no longer fetching the 11 percent returns they were getting in 2005 as it is focusing its economy on low-risk growth, Wang said. Mainland stocks will be an integral part of long-term global investment, he continued, saying they provide solid returns and can help diversify risk.

The Vanguard Group is one of the world's largest public fund managers and operates in Australia, Europe, Asia and the Americas. It was managing USD6 trillion in global assets and providing professional services to more than 30 million investors as of last month.

Editor: James Boynton

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Keywords:   Vanguard,Stock markets