And the gains were not limited to China. Korean and Japanese stocks — indirect beneficiaries of the upturn in China’s economy — are also outperforming the broader market.
It is difficult to predict if the spike in U.S. volatility we saw last week will be short-lived. Even if it is, we find still cheap valuations, some lift in China’s economy and improving sentiment are all good reasons to consider larger allocations to Asian equities, including those in both China and Japan.
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.