Nimbleness and adaptability are some of the key qualities that global investors will need when navigating geopolitical pressures and market volatility. That’s the main mantra of business leaders sharing their insights at the Hong Kong Monetary Authority’s ( HKMA ) Global Financial Leaders’ Investment Summit.

In one of the sessions at the event on Wednesday ( November 5 ), panellists advised investors to accept the new reality and adapt to the changing environment. “Tariffs are here to stay from a US policy perspective. I think it is going to outlast the current administration,” says Eric Stein, chief investment officer at Voya Investment Management. “The US and China fissure is structural. There are going to be ups and downs. We are still in an area of globalization – we are not doing deglobalization but rather reglobalization with these two distinct economic blocs, and maybe with some unaffiliated countries, maybe a third bloc.”

Hendrik du Toit, founder and chief executive officer of Ninety One, pursues a related view as he urges investors to closely study the domestic companies they invest in and understand if they fit in the national policy of a particular country.

“I grew up in an emerging market where the West preached a certain orthodoxy until they got outcompeted and then changed the rules. It is driven by domestic politics, driven by issues at home, not global issues. We are going to have a different globalization, but we have to understand that nations will be driven by their own domestic interests, rather than by a fair global order imposed by a benign hegemon,” he asserts. “That means you have to understand what is happening in each region and each country you invest in because that is going to drive the policy logic. As investors, we need to do a lot more bottom-up work.”    

Still, some of the panellists believe that technology, particularly artificial intelligence ( AI ), could greatly alter the landscape of leading companies globally. “There are enough headwinds and tailwinds that are coming in for corporates to navigate that will change the earnings picture of the world in the next 10-20 years,” notes Jean Hynes, chief executive officer and managing partner at Wellington Management. “That is where deep individual research will really come in to differentiate where the world is going and who is going to benefit.”

Invesco president and chief executive officer Andrew Schlossberg, on the other hand, sees the global economic fragmentation as a temporary blimp, given how much connectivity has been established in the world over the past decades. “We will look back in 10 years, we will still see a connected global economy, a connected global market. I just don’t think we can go backwards. Innovation technology – and frankly, the consumer is what is going to drive this,” he maintains.

The panellists voiced a positive sentiment towards a world brimming with innovation. “There is opportunity today to back more entrepreneurs in more places and get the diversity in your portfolio that you probably lacked in a world that was dominated by a single economy or a single economic system. That is what excites me at the moment,” Du Toit highlights.

Overall, the panel emphasized the need for investors to diversify their holdings and keep dry powder on the side. There were also comments on the US dollar downcycle with asset diversification away from the US and towards smaller markets where opportunities thrive.

Regarding fears around an AI investment bubble, the panellists suggested a focus on energy providers powering critical data centres for AI use. That would be an economic way to gain exposure to the ongoing AI trend. 

Photo: An attendee engages a humanoid robot in a playful boxing bout at the Hong Kong Investment Summit. ( HKMA )