Funds Fan: Scottish Mortgage, bonds are back and China’s a buy

Retail investor sentiment in July shifted toward risk assets, with notable inflows into technology-focused funds and Nasdaq trackers, while defensive holdings like gold and wealth preservation trusts saw reduced demand. Despite market uncertainty, bond yields have become increasingly attractive following a historically poor first half of 2022, offering potential for both income and capital gains. Meanwhile, Scottish Mortgage exceeded its 30% limit on unquoted shares due to valuation shifts, and JP Morgan Russian Securities proposed a mandate change to include broader emerging markets to avoid liquidation. Fiona Yang, co-manager of the Invesco Asia Trust, highlighted the value of contrarian strategies in Asian markets, specifically noting that China’s current valuations and supportive policy shifts present significant opportunities. The trust maintains a disciplined approach to fundamental analysis, focusing on undervalued franchises while balancing exposure to volatile sectors like Chinese internet companies.