Worries over slowdown: Move out of China & switch to US funds, say wealth experts

Wealth managers recommend investors move out of China and Europe-based funds to US-based funds. High valuations and slowing growth have led to the Chinese markets correcting by 38% since mid-June, after it doubled by 100% over the last one year.

Some aggressive investors put money into funds like Mirae Asset China Advantage Fund and JP Morgan JF Greater China Equity Offshore Fund, which together manage Rs 112 crore, as of July 2015. Wealth managers believe investors could take profits from these funds now and reallocate them to developed markets.

“Given the uncertainty surrounding the Chinese markets and slow growth expected in the European markets, investors would do well to shift away from there,” says Vishal Dhawan, chief financial planner, Plan Ahead Wealth Advisors.

“The prospect of US rate hike and a shrinking trade deficit continue to support a stronger dollar,” says Gajendra Kothari, MD, Etica Wealth Management.