Some money managers are picking over stock markets, searching for value amid the panic caused by the spread of the coronavirus.
Opportunities are being found in India and in currency pairings, executives said.
"We have added to our exposures in Indian stocks within our China India fund," said Ken Wong, Asian equity portfolio specialist at Eastspring Investments based in Hong Kong. "As bottom-up stock pickers we are seeing a lot of stocks that are now trading well below their intrinsic values, which is providing a lot of value now." The fund was previously underweight India and added in Indian financials. Mr. Wong did not specify exposure.
Currencies are another area where managers are finding opportunity, thanks to their use as a tool to support growth by policymakers.
"However, currencies are also impacted by the flow of money around the world," said Georgina Taylor, multiasset income fund manager at Invesco, Oxford, England. "When investors get nervous, they often take their money back home and this in turn pushes up the price of the currency."
The Japanese yen, a defensive currency in risk-off environments, is a good example, Ms. Taylor said. "From a multiasset investing perspective if we can find ideas which are good value in their own right but also have defensive qualities, then that is very helpful when very quickly markets move into a risk-off environment as they have done recently."
Ms. Taylor said buying the yen as a defensive currency vs. the Korean won — an export-oriented economy — "has been one of those ideas in the portfolio."
Reducing exposure to bonds and equities "makes sense whilst moving the risk of the portfolio into relative value ideas. This feels a sensible move in this environment and reduces the risk that the portfolio swings around with both bond and equity markets," Ms. Taylor said.
That risk can be redistributed into currency pairs, relative value bond and equity opportunities and volatility "to ensure we still have return-generating ideas in the portfolio which are less sensitive to the broader market risks now rippling across markets," she added.