Manulife Investment Management has approximately $394 billion in assets under management as of September 30, 2019. In terms of region, The company's portfolio is tilted towards the US with a 52 percent exposure, followed by 25 percent exposure to Asia, 21 percent to Canada and the balance 2 percent to Europe.
With challenges on the fiscal side and given the pace of privatisation, Manulife Investment Management’s Global Chief Investment Officer Chris Conkey sees India neutral in terms of investments when compared among emerging markets.
In a candid chat with Moneycontrol, Conkey said, “We see India as neutral, relative to other emerging market equity alternatives.”
Conkey felt that there are some challenges in the execution of government policies that is impacting the economy along with challenges on the fiscal side and the rate of privatisation.
“We are very enthusiastic and positive about the policies the government's putting in place. And we can see that how it has been captured by retail investors throughout the country, in terms of investing and funding, in its own growth. So it depends upon the quality of execution and the pace at which it happens,” said Conkey.
In the Manulife Investment Management’s global emerging markets portfolio, exposure to India stands at 10 percent, while they are overweight on China in the portfolio.
He, however, said that they are bullish on India for the long term given the growth in the savings rate of private banks in Tier-2 and Tier-3 cities, which will help India to revert back to its premium status when compared to the rest of the emerging markets.
Manulife Investment Management has approximately $394 billion in assets under management as of September 30, 2019. In terms of region, Manulife’s portfolio is tilted towards the US with a 52 percent exposure, followed by 25 percent exposure to Asia, 21 percent to Canada and the balance 2 percent to Europe.
In June 2019, Toronto-based Manulife picked up a 49 percent stake in Mahindra Asset Management Company (Mahindra AMC) for $35 million (Rs 243 crore).
Mahindra AMC entered the mutual fund industry in 2016. It is among the smaller asset management companies in the country and has assets under management of a little over Rs 5,000 crore as of its December quarter.
Conkey said their partnership with Mahindra AMC is for long term and added “We believe the bulk of the assets are in Tier 1 cities, the largest growth rate is happening in tier two and tier three which will aid penetration of both the brands across the country.
Conkey expects the Fed to go on one more rate cut this year and after that, it may be on hold for an extended period of time.
“We believe this degree of uncertainty in the market will support the Fed and keep down any impact or any influence by the Fed to raise rates. So it should be positive for emerging markets,” said Conkey.
He however felt that any impact that could come from the events around Iran may have an impact on India and any other primarily oil-importing countries.
In terms of investment, Manulife Investment Management is overweight on equities, particularly developed market equities, while on the debt side, the fund house is overweight on emerging market debt relative to a developed market.
Active versus passive fund management
When asked on the debate of existence of active vs passive, Conkey said, “There is going to be a balance in the industry between passive and active.”
“Passive creates opportunities for strong active managers. But the reality is the technology is moving so quickly in terms of education and the development of alternatives that the bar gets even higher for active managers, making them stronger,” Conkey said.
Conkey recommended that Indian investors look for global diversification, particularly in countries where there is not only growth, but also divergent growth patterns.
"One can look at investments in the US as it is in a very good position. With somewhat easing trade tensions, Europe is expected to benefit quite well this," said Conkey.He also added countries like Europe and Germany that are large export-oriented economies are going to be beneficiaries as the trade tensions decrease.