Jordan Cvetanovski, the Chairman and Chief Investment Officer of Pella Fund, stated that investors should consider high-quality companies in China and Europe that have superior valuations and perform exceptionally well even in these "severe" political and economic conditions.

Cvetanovski mentioned that over the past two to three months, Pella Fund has been seeking opportunities in China and has increased its investment exposure to China by "over 10%". The company strictly focuses on valuations, which has expanded its investment areas beyond the USA, such as Europe and Asia.

He stated that China is currently introducing more fiscal measures. As early as November, China announced a five-year stimulus plan totaling 10 trillion yuan (approximately 1.37 trillion USD) to address local government debt issues.

Cvetanovski noted, "For these companies, we expect that any stimulus measures that authorities will introduce will be extremely beneficial to them, as these companies have very low valuations and there is also low allocation from global managers."

He added, "We expect returns to be very strong, and considering the various concerns around trade wars, we believe now is the best time to prepare for next year."

Cvetanovski indicated that the fund focuses on companies that are reasonably priced and may benefit from fiscal stimulus, including robot manufacturers.$MIDEA GROUP (00300.HK)$、 $HKEX (00388.HK)$ And Insurance Company.$AIA (01299.HK)$。

He stated that Pella Fund has been focusing on HKEX for many years and expects it to benefit "greatly" from market boosts and new stock issues.

Cvetanovski stated, "One of the best quality companies in the region is AIA, which has consistently performed well year after year." He added that if this Insurance Company were to go public in the USA, its valuation would be 50% to 70% higher from day one.

Opportunities in Europe.

Despite the collapse of the German and French governments bringing much uncertainty to the Eurozone, Cvetanovski stated that traders' cautious attitude toward investing in Europe has created a "great" opportunity for the Pella Fund.

The portfolio manager mentioned the French electrical equipment manufacturer Schneider Electric, which is still increasing its expected growth rate and profit margin even amid recent political turmoil in France.

Schneider Electric has been seeking to capitalize on Europe’s digital transformation and the booming AI sector by investing heavily in its datacenter business. In July of this year, the company raised its financial targets for 2024 against a backdrop of record revenues and increased profit margins.

Cvetanovski stated that the Pella Fund has recently invested in the UK engineering company Spirax Group and the Swedish mining and infrastructure equipment manufacturer Epiroc, and expects these companies to benefit from the recovery in capital expenditures in the mining industry.

Cvetanovski mentioned, "These companies will benefit again from the fiscal measures implemented by China. But most importantly, these companies are priced cheaply and are growing, which can justify the prices we are paying, whereas we generally cannot really justify the valuations of some companies in the USA."

Editor/Rocky