Global fund managers say they are rushing to meet client demand for new Asian investment products that exclude China, as investor appetite for the region’s largest economy is hit by slowing growth and mounting geopolitical risk, reports the Financial Times. Fund managers said requests for “ex-China” products included the possibility of “Asian allies” funds that would invest in US-friendly markets and provide clear insulation from Beijing-related geopolitical risk in the region.
The widespread adoption of such investing would mark one of the biggest structural shifts for Asia-Pacific markets since the advent of “Asia ex-Japan” portfolios roughly three decades ago, according to asset managers. They said demand had been stoked by worsening US-China tensions and a rally for the rest of the region that had left its biggest market behind.
“Investors are concerned about geopolitics,” said Minyue Liu, investment specialist at BNP Paribas Asset Management. Liu said international clients had begun sending out RFPs—requests for proposals—to provide investment funds that would cover the Asia-Pacific region but exclude both China and Japan.