Chinese Fund Managers Cut Proposed Equity Risk
Managers of the Chinese funds have cut the proposed equity risk for the next three months amid a sharp correction of major stock indexes since early February. According to a survey of eight Chinese fund managers, they reduced their suggested equity allocations to 76.3% from 76.9% a month earlier. At the same time, fund managers raised their suggested bond allocations for the next three months to 8.8% from 6.9% last month, and reduced the recommended cash allocation to 15% from 16.3%.
According to the survey, the average recommended allocations for electronic shares for the next three months were increased to 15.9% from 12.8% in the previous month, for financial stocks were reduced to 18.8% from 21.9%, while for of real estate firms was reduced to 7.5% from 10.3% last month.
Analysts said that despite the recent strong rally in the stock market, potential risks remain, including a possible increase in rates in China and the US, as well as a serious correction in foreign markets. Overall, the fund managers surveyed were optimistic on asset allocations for the next month, with three suggesting an increase, one suggesting a cut, while four recommended the same level of equity exposure.