Why Asia looks attractive despite inflation fears

ON ASSET ALLOCATION

While equity markets are currently affected by heightened uncertainty and extreme risk aversion, company fundamentals have not changed.

Many companies are in good shape after paying down their debts and are currently undergeared, making them attractive investment propositions. Over the last few years, much has been done to repair balance sheets and, once again, earnings are being driven by top-line growth as well as cost control. The second quarter earnings season was mostly reassuring, despite the disruption to the supply chain following March’s Japanese crisis. Within our equity-oriented funds, we currently have a tilt towards Asian and emerging markets due to relatively attractive growth prospects and reasonably...