UBS China equity strategist Wang Zonghao said UBS’s tracking of about 800 active
foreign funds shows foreign institutional allocations to China equities were
broadly unchanged in Q3. By sector, international investors net increased
positions most in healthcare, internet and technology—likely aided by IPOs and
placements—and trimmed insurance, basic materials and autos. UBS remains
constructive on China AI tech hardware given attractive risk/reward, but warns
the recent global tech sell-off could produce further spillovers into domestic
names. With AI sentiment still fragile and public mutual funds’ AI hardware
holdings remaining elevated, Wang recommends a barbell approach pairing tech
hardware with banks.
