The volatility of Asian markets is keeping many Canadian investors on the sidelines – instead opting for life insurers operating in the Pacific rim
Emerging markets in Asia are drawing the attention of Canadian investors, but the volatility of those markets is keeping many on the sidelines – but life insurers are providing a safer solution.
“My preferred way of getting exposure to these volatile and less mature markets would be to invest in companies that have businesses in those countries,” says Lieh Wang, senior portfolio manager, Canadian equities, Empire Life Investment. “For example, by investing in Manulife, they have a fast-growing Asian business, so you can get exposure to Japan, Indonesia, China through their subsidiaries.”
Empire Life Investments has very little direct investment in these EM markets, including, says Wang, along with more volatile ones like Russia and Brazil. But by investing in established North American companies that do business in these markets, it provides a more stable investment vehicle.
“For example, by investing in Manulife, they have a fast-growing Asian business,” Wang told LHP, “so you can get exposure to Japan, Indonesia, China through their subsidiaries.”
Another plus for life insurers is the higher interest rate in the U.S., which is a powerful draw for Canadian investors.
“You have Canadian companies benefitting from a higher interest rate than in the U.S. – specifically that would be Canadian life insurance companies like Sun Life and Manulife,” says Wang, “as they are sensitive to rising rates and also specifically rising rates in the United States. Manulife would be one such example.”
“My preferred way of getting exposure to these volatile and less mature markets would be to invest in companies that have businesses in those countries,” says Lieh Wang, senior portfolio manager, Canadian equities, Empire Life Investment. “For example, by investing in Manulife, they have a fast-growing Asian business, so you can get exposure to Japan, Indonesia, China through their subsidiaries.”
Empire Life Investments has very little direct investment in these EM markets, including, says Wang, along with more volatile ones like Russia and Brazil. But by investing in established North American companies that do business in these markets, it provides a more stable investment vehicle.
“For example, by investing in Manulife, they have a fast-growing Asian business,” Wang told LHP, “so you can get exposure to Japan, Indonesia, China through their subsidiaries.”
Another plus for life insurers is the higher interest rate in the U.S., which is a powerful draw for Canadian investors.
“You have Canadian companies benefitting from a higher interest rate than in the U.S. – specifically that would be Canadian life insurance companies like Sun Life and Manulife,” says Wang, “as they are sensitive to rising rates and also specifically rising rates in the United States. Manulife would be one such example.”
