The Taiwan fund arm of UBS will launch a T$10 billion ($312 million) emerging markets equities fund this year targeting China and Russia, on expectations of stronger growth and cheaper valuations, an executive said.
China, Russia, Brazil, India and other emerging markets are attractive to UBS, the world's biggest wealth manager, and other Taiwan fund houses as stock prices are cheaper and economies are recovering at a faster pace from the global financial crisis.
"We like China and Russia," Johnny Wong, president of UBS Global Asset Management (Taiwan), told Reuters today.
"In BRIC markets, Russian stocks are the cheapest and Chinese stock valuations also look attractive," Wong said on the sidelines of a Lipper fund awards event.
UBS likes Chinese healthcare and consumer products companies, including Ports Design, a Chinese luxury garments maker, which would benefit from the mainland's solid economic growth.
"Even though the Chinese currency is under growing pressure to appreciate -- say 2-3 percent this year -- it would not affect companies that rely on domestic consumption that much," Wong said.
The firm was bearish on banks and insurers as the Chinese government was expected to take further measures to cool the country's property market, he said.
The fund, which UBS Taiwan planned to launch in the second half of 2010, would boost its assets under management by 20 percent from T$50 billion, Wong said.
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