As you may have heard, Russia invaded Ukraine last Thursday. This has caused investors to wonder what could happen to their portfolios. Fortunately, institutional investors have given their thoughts on what could happen and how investors should approach this event. Specifically, Mark Mobius stated that investors should invest in Chinese equities, emerging market stocks, and gold. In this article, I’ll discuss how you can add exposure to these assets.
Chinese equities
Over the past year, many investors have been hesitant to invest in Chinese stocks. This is largely due to the political climate in China. However, the fact of the matter remains that China is one of the most important countries in the world in terms of global production. As a result, it’s important to take note of how it plans to approach major events.
Mobius believes that China will refuse to take either side in the Russia-Ukraine conflict and remain in the middle ground. He goes on to state that China could continue to produce and grow, despite the ongoing crisis in Europe. As a result, Chinese equities would be an excellent place to store capital in the meantime. Canadians can gain exposure to this region by investing in the iShares China Index ETF. This gives you exposure to companies like Tencent, Alibaba, Meituan, and JD.com.
Emerging market stocks
Mobius also stated that emerging markets would be a great place to find growth. He listed several Asian countries including the Philippines, Thailand, and Vietnam, among others, as first places to start looking for opportunities. Mobius also mentioned that India or South American countries like Brazil shouldn’t be overlooked either. All told, investors could look at stocks from several different countries and find great opportunities.
Canadians can gain exposure to emerging markets via several different ETFs. One example would be iShares MSCI Emerging Markets Index ETF. This will give investors exposure to companies like Samsung and Vale. It’s important to note that many of these emerging market ETFs also include Chinese companies. So, if you’ve already picked up a Chinese equities ETF, then the companies held in the two funds may be overrepresented. If that’s an issue for you, then look for emerging market ETFs that exclude Chinese companies.
Gold
Finally, Mobius states that gold is an important asset to hold. This event could result in a devaluation of currency. That would result in inflation. Historically, gold has been a widely used as a hedge against inflation.
Like the other asset types given in this article, investors can gain exposure to gold by investing in ETFs. Going back to the same well, investors should consider iShares S&P/TSX Global Gold Index ETF. This will give investors exposure to many different producers of gold and related products around the world. Companies held in this ETF include Barrick Gold, Agnico Eagle Mines, and Wheaton Precious Metals, among others.
