(Yicai) Nov. 12 -- A number of multinational asset managers attending the Shanghai Global Asset Management Forum hosted by Yicai said they plan to increase their allocations to China because of heightened volatility in global asset markets and growing demand for risk diversification.

Against the backdrop of a low-interest-rate environment and high volatility in individual markets, the significance and value of global multi-asset allocation are becoming much more pronounced, according to Wang Qian, general manager of Amundi Bank of China Wealth Management, China’s first foreign-controlled wealth management joint venture.

Chinese JV wealth managers are working to bring Europe’s mature advisory and solutions models to the Chinese market, connecting Chinese household wealth with global markets through multi-layered asset allocation tools, Wang said.

At yesterday’s event, the Shanghai Asset Management Association and the French Asset Management Association signed a memorandum of understanding. AFG Chairman Philippe Setbon said that the deep complementarity of China and France in pension finance, green finance, and cross-border asset allocation will offer global investors a more diverse range of asset choices.

While short-term macroeconomic uncertainty may weigh on equity valuations, identifying intrinsic value lies at the heart of successful investing, said Liu Song, president of Neuberger Berman Asia Pacific. 

AI is likely to evolve into two relatively independent ecosystems, one in China and one in the United States, Liu noted, adding that “as global investors, we definitely need to allocate to both.” The integration of China’s AI applications with high-end manufacturing, and its massive domestic demand and retirement pension needs, creates a long-term, sustainable investment theme, he said.

The forecast price-to-earnings ratio for Chinese mainland stocks is only 10 times, which does not fully reflect the long-term prospects of many Chinese companies and remains below the historical average, at a substantial discount compared with some developed markets, Tian Di, a fund manager at Fidelity International, previously told Yicai.

Tian believes that Chinese shares still have room for improvement in earnings and valuations. Supported by technological innovation, industrial upgrading, electrification, and healthcare, China’s growth opportunities are gradually extending beyond traditional consumption, which is bringing new investment opportunities, he said.

European investors are very interested in China, and the overall sentiment is positive, but converting that into actual allocation still faces challenges, such as obtaining product approval in Europe, completing client due diligence, managing currency risk, and covering the costs of fund structures, said Fabrice Chemouny, head of international distribution at Natixis Investment Managers.

Chemouny hopes Shanghai can become an operations and coordination hub, with shared operational support, such as centralized product information, reporting, and translated documents, and coordinated account opening, trade support, reconciliation, and cash management services across different products.

Editor: Futura Costaglione