A BlackRock manager is locking in profits in Asian chipmakers. What is he buying?

BlackRock Tactical Opportunities Fund with $5.2 billion in assets is taking profits on an overweight position in shares of Asian chipmakers, its co-manager Thomas Becker said. It is about companies from Taiwan, South Korea and Japan, Bloomberg reports. The fund invests the released funds in French shares, expecting further growth of investments in the European energy sector.

Eurozone stocks look attractive after the recent correction, says Becker. The index tracking the region's largest companies, the Euro Stoxx 50, is down 3.8% since the beginning of March. By comparison, the S&P 500 is up about 8% over the same time, while South Korea's Kospi index has soared nearly 38%. The rally in South Korea was supported by active purchases of securities of semiconductor manufacturers - Samsung and SK Hynix - amid a shortage of memory chips. At the same time, despite fears of market overheating, JPMorgan believes that investors should keep betting on its further growth and not expect a premature end of the cycle.

Becker believes that the divergence in the dynamics of markets in different regions creates an opportunity to buy cheaper European securities. In particular, he called the shares of French companies "attractively valued". This year, the CAC 40 index is down 0.8%, and since the start of the war with Iran, it has lost 4.6%.

"If you look at the backlog of the CAC over the last year, over the last three years, it's pretty substantial. It's a highly cyclically sensitive index. It has big energy companies in it, so we think the market is close to the bottom - it's darkest before the dawn," Becker said in an interview with Bloomberg TV.

The bet on Eurozone equities is built on expectations that in the face of an energy security crisis, the authorities will encourage investments that can boost the economy's productivity, the manager explained. At the same time, he acknowledged that the region faces structural challenges in AI development: electricity costs there can be three times higher than in other countries, worsening the economics of data centers.

This article was AI-translated and verified by a human editor