INTERNATIONAL - BlackRock Inc. is still bullish on tech stocks.
While many investors have identified challenges in the sector after a lacklustre 2018 that saw the Nasdaq Composite Index’s first annual decline in seven years, the world’s largest money manager is staying the course on the long-term trend, according to its chief equity strategist Kate Moore.
“We’re not giving up on technology,” she said in a Bloomberg Television interview with Shery Ahn and Haidi Lun on Wednesday. “The tech sector is still a well-liked and well-loved sector across BlackRock.”
Tech shares from the U.S. to China have languished in the past year as trade tensions between the two nations and concerns over slowing economic growth have hit the sector. The NYSE FANG+ Index lost almost half a trillion dollars in value last year from the end of January.
Regulation and policy have also damped sentiment as U.S. tech giant Facebook Inc. has faced a number of controversies regarding personal data protection and the shock arrest of Huawei Technologies Co.’s finance chief last year shone an unprecedented spotlight on China’s largest technology company in the midst of U.S.-China tensions.
Companies are absorbing those changes and willing to work in that environment, Moore said. Investors should look to own both U.S. and Chinese technology stocks for diversity in the long term as they operate in different markets and have less overlap than often assumed, she added. Moore is hopeful ongoing trade talks will conclude with an agreement between the two nations to explore “opportunity for cooperation” in tech.
BlackRock’s top call for the year is healthcare stocks for their increasing use of technology and innovation, Moore said. Healthcare offers income, stability, defensiveness against a downturn too, she said.
On the broader trade tensions, Moore said that the issues were likely to hang over the markets for “years not quarters,” but that equities could stabilize or see a floor if an agreement is reached.
Still, much fear has already been priced into emerging markets equities and Moore reiterated an overweight call on the asset class. Many high quality companies have been ignored by international investors, she said. Moore maintained her underweight call on European equities in 2019, which she said would see a challenging year amid political challenges and a slower growth environment.