There is more upside in Chinese equities, said Lombard Odier chief investment officer Stéphane Monier, underlining that the current rally is around two-thirds complete.
Lombard Odier is positive on emerging market equities, mainly in China, with a positive earnings outlook and strong support by authorities in the real estate market.
«We are roughly between two-thirds and 70 percent of the Chinese equity rally,» said Lombard Odier group managing director and CIO Stéphane Monier in a briefing on Wednesday attended by finews.asia.
Adani Risk
But elsewhere in emerging markets, more caution is warranted such as in India where the Swiss bank advises investors to be more strategic with valuations now considered stretched.
«Maybe with this kind of incident with Adani, there will be a little bit more correction on Indian equities,» Monier noted.
In developed market equities, the bank is underweight.
Overweight Alts
Lombard Odier is also overweight on alternatives, across hedge funds, private equity, private debt, infrastructure, real estate and commodities, to enhance portfolio diversification.
«This allows you to better balance your performance, especially in a year like 2022,» Monier explained.
Overall, Lombard Odier advises investors to take a neutral position in portfolios while being underweight in cash and overweight in fixed income. Within the latter asset class, the bank advises investments in government securities or investment grade credit.
