In an interview to CNBC-TV18, Geoff Lewis, executive director, JP Morgan Asset Management shares his pecking order.
Geoff Lewis, executive director, JP Morgan Asset Management says the brokerage house prefers risk assets and is overweight US equities and Asian markets like India, China, Korea and Taiwan.
Below is the verbatim transcript of Geoff Lewis’s interview with CNBC-TV18’s Latha Venkatesh and Sonia Shenoy.
Sonia: We have seen a relative outperformance from the Chinese markets, at least in the last three or four days. For the new year i.e. calendar year 2015 what is our pecking order in terms of asset classes and equity markets now?
A: Our pecking order we prefer risk assets and as risk assets we would be overweight equities and in the fixed income space we prefer credit and high yields still and would be underweight on government bonds and underweight cash also and underweight commodities. Within the regions we would still be overweight US equities but also on valuation grounds because we think markets are currently too negative.
We would be overweight Europe and Japan, broadly neutral on emerging markets because although they are improving slowly we don’t really see strong drivers and within emerging markets we would be underweight the commodity producers, Latin America, Middle east and overweight Asian manufacturers that would include both China, India and Korea, Taiwan.
Latha: You would be underweight these countries; the last four?
A: No, overweight Asia manufacturers who will benefit from cheaper oils and within Asia we would prefer China, India, Korea, Taiwan.