Investing

Confidence in Chinese investments has taken a knock following the recent tightening of Chinese regulations. However, fund manager Fidelity International believes the Chinese growth story is intact and there are opportunities for long-term investors as the underlying trends have remained intact despite increased state intervention.

The emergence of distributed ledger technology (DLT), of which blockchain is a form, could bring about a shift from a platform economy to a protocol economy. In this, data is the key to the economy, explained Ralph Wessels of ABN Amro in an article published by his employer on tokenisation, part of a three-part series on cryptocurrencies published by the bank. 

The EU’s ESG investment taxonomies are evolving. Only certain aspects of climate action are currently taken into account, but work is on-going so that the environmental taxonomy covers more areas and will be applied in a subtler fashion.

It is too early to talk about stagflation, but inflation risks are rising and therefore central banks need to be very vigilant about tightening monetary policy early if prices rise and global growth slows. 

While the price of gas shot through the roof last week, it seems that a real energy crisis can be avoided in the short term now that Vladimir Putin is going to supply extra gas. Nevertheless, the unexpected turbulence in the energy market is reason for ING to reassess its investment strategies. It is a perfect storm.

There is a risky and dangerous novelty in the financial markets: “the prices of stocks, bonds and real estate, the three most important asset classes in the United States, are all extremely high”. 

That is the warning from Robert Shiller, the 2013 Nobel Prize-winning economist and scientist, in an opinion piece in the New York Times. “Never have the three been so overvalued at the same time in modern history.”

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“The abnormally high inelasticity of supply in relation to house prices, cannot continue without affecting the banking, financial systems and national economic system,” was the stark warning issued by the Luxembourg Centre Bank (BCL) in its latest Financial Stability Review.

Faced with the recent strong growth of demand for sustainable investing products, the question can be asked: are fund distributors able to keep up with asset managers in equipping themselves to deliver what such investors are seeking? One participant at the recent ALFI Global Distribution Conference expressed some doubt.

Sustainable funds have grown significantly in the past few years, according to a new study. Sustainable funds’ net assets have increased by as much as 450% since 2018, rising sharply as a share of total fund assets.

Net new money invested in such funds was positive Europe-wide, up 50% in June 2021, reflecting 510% increase of net new money into sustainable funds over the 2018 level.

With the Chinese government cracking down, foreign investors are reassessing their exposure to China. It is a balancing act between capitalising on the lucrative opportunities the country offers and protecting portfolios against the apparent arbitrariness of the government. The attentive investor can nevertheless hold on to a common thread.