Greater China manager counsels caution over booming market

BMO fund's June Lui cites high valuations and excessive debt levels.

Michael Ryval 26 October, 2017 | 5:00PM

Asian stocks have had a strong run-up this year, with the average fund in the Greater China Equity category up 33% in the year to date to Oct. 20. For June Lui, whose own fund, BMO Greater China Class, is up 30.6% in the same period, caution is the watchword.

"I'm guarded about the outlook," says Lui, a portfolio manager with Hong Kong-based BMO Global Asset Management (Asia) Ltd. who oversees the 3-star Morningstar-rated fund.

Among her worries are the elevated equity valuations in Asia and around the world, and the US. Federal Reserve's moves to tighten monetary policy. "The market has not priced in this deleveraging process, nor some of the geopolitical tensions," says Lui, referring to the tough talk between the United States and North Korea, and uncertainty surrounding policy actions by neighbouring China and Russia.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
China Mobile Ltd ADR34.73 USD-0.80
Tencent Holdings Ltd ADR53.58 USD-0.61

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Michael Ryval

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