DWS Group, which has €859 billion under management, said investing directly into Chinese equities carries risks due to unexpected regulatory changes, so it favors exposure to firms that could indirectly benefit from trends such as industry automation and digitalization.
European luxury goods-makers including LVMH, Gucci-owner Kering SA and Hermes International get up to a fifth of their revenue from China. The country is also a major market for miners and automakers — sectors that have been hit hard by a property market crisis and an uneven post-Covid economic recovery.
Optimism toward China has also faded, with Bank of America Corp.’s latest fund manager survey showing a record rotation away from emerging markets. Broader positioning in European stocks has remained bearish, the survey showed, with investors preferring US stocks amid signs of a resilient American economy and bets of a peak in interest rates.