The Zhitong Finance App learned that Chris Brightman, chief investment officer of Research Affiliates LLC, a quantitative fund owned by Pacific Investment Management Company (PIMCO), recently said that he has seen investment opportunities from Chinese tech giants and said that the stock valuations of these companies are attractive.
As valuations become less expensive, “we are getting closer to the point where these positions are included in our portfolio,” Brightman said.
In an interview last week, he said that after years of pain, the valuations of Internet platform companies such as Alibaba (BABA.US) and Tencent (00700) have fallen to historic lows, and these companies have become attractive.
Brightman's views echo those of his peers. Currently, quite a few funds have begun to increase their holdings of Chinese stocks, because once the right catalyst is in place, these assets may rebound at any time. Furthermore, further signs that China's economic recovery is gaining momentum and the recent rise in the Chinese stock market have raised hopes that the market is bottoming out and rebounding.
Compiled data shows that in the past year, the Pimco RAE Emerging Markets Fund, which holds a large amount of Chinese stocks and manages $1.6 billion in assets, beat 94% of its peers.
Brightman said the reason the fund was able to reap impressive returns is due to its quantitative model of investing based on factors such as book value, sales earnings ratio, cash flow, and dividends. The fund currently holds China Construction Bank (00939), Bank of China (03988), and CNPC (00857).
“From a value perspective, China looks very attractive right now. This is in contrast to very expensive stocks, such as Indian stocks,” Brightman said.
Brightman also added that the Chinese stock market “provides significant compensation for significant geopolitical risks.”