AMUNDI SA is looking beyond the market volatility caused by China’s regulatory overhaul of its economy to focus on stocks which are strategic to the country’s goals.

“This short-term pain could unveil its benefits over the long run and provide good entry points to long-term investors,” said Vincent Mortier, deputy group chief investment officer at the asset manager.

“We are focusing on strategic sectors where government policy is a clear tailwind rather than a headwind.”

Mortier said his firm, which oversees US$2.1 trillion globally, is concentrating on clean energy and biotech stocks.

“The former could benefit from China’s plans to become carbon neutral by 2060, while the latter is a cornerstone industry for the Chinese Government,” he said.

While regulatory uncertainty has made Amundi more cautious on Chinese technology stocks, Mortier said that he is watching out for new national champions to develop from the local innovation drive, particularly in semiconductor, software and industrial sectors.

The sell-off in the wake of China’s regulatory actions on a large swathe of sectors erased US$1 trillion from the market value of Chinese stocks listed globally last month.

Still, money has started trickling in again, with the Hang Seng Tech Index rising 9.4 percent in the past two days after falling to its lowest since inception.

Cathie Wood, famous U.S. stock picker and founder of Ark Investment, has also made her first move to get back into China’s tech stocks.

(SD-Agencies)