According to a T. Rowe Price paper – Global Growth Equity Strategy: An all-weather approach – despite the sell-off in China, there are still growth opportunities.
T. Rowe Price portfolio manager and report author Scott Berg said the firm is centred on stock-selection and portfolio construction.
“We have remained engaged by focusing on quality, long-term growth companies that we expect to do well even if Greece leaves the euro or the Chinese economy slows more than expected,” Mr Berg said.
“We will always keep our focus on the stock fundamentals, including valuations, as we navigate each bout of market volatility.”
Mr Berg said that while China’s growth has slowed from double-digit levels, it is still growing at twice the pace of the US.
Beijing’s large foreign currency reserves and its reform process, including anti-corruption programs, should be positive over the long term.
As a result, Mr Berg indicated that the firm has changed its China holdings and manoeuvred its portfolio to take advantage of new opportunities.
“When it comes to investing, however, if you try to avoid losing, you are also likely to avoid winning,” Mr Berg added.
While T. Rowe Price has remained in China, there are still notable risks.
“There are bona fide concerns of the amount of leverage in the system, the record of centrally planned governments trying to manage soft landings for large economies, the murky corporate governance in many companies and valuations are still not cheap,” Mr Berg said.
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