Gold, pesos and lasers: What’s on Fidelity’s investment radar

[HONG KONG] A weakening US dollar and volatile equity markets were among the hotly-discussed themes at Fidelity International’s Asia-Pacific Media Investment Conference in Hong Kong on Thursday (Jul 3).

Speaking at the event, the firm’s portfolio managers and analysts – who collectively manage US$900.7 billion in assets – outlined investment opportunities they are eyeing across currencies, commodities, and emerging markets.

Here are some of the key picks:

1. Betting against the greenback

The US dollar could continue to weaken, said Matthew Quaife, global head of multi asset, who favours the euro and yen.

“If I were to shut my eyes and say: ‘Will the dollar be weaker or stronger in a year’s time?’ I think it would be weaker against the euro and yen,” he said.

The greenback has fallen 11.65 per cent and 8 per cent year to date against the euro and yen, respectively, as at Friday’s close.

A weaker dollar means that investments in euro- or yen-denominated assets – such as equities or bonds – would deliver higher returns when converted back to US dollars.

2. Gold still glitters

“We continue to like gold; we’ve liked gold for a while, so obviously that’s been a good trade,” said Quaife. “It’s likely going higher, even though it’s gone a long way.”

Spot gold prices have climbed 27.11 per cent year to date, fuelled by safe-haven demand amid US dollar weakness.

While the metal has already “run some distance”, it could rise further if investors rotate out of US Treasuries, Quaife added: “If even a small amount of US Treasury money goes chasing (after) gold, it can really run.”

3. Long on Philippine government bonds

Philippine central bankers may cut rates again amid sluggish growth, said portfolio manager Terrence Pang, making local currency government bonds an attractive bet.

“We certainly see potential to cut (interest rates) twice, if the growth continues to be sluggish,” he said.

The Bangko Sentral ng Pilipinas last trimmed its policy rate to 5.25 per cent in June, its lowest in two-and-a-half years.

With bond prices typically rising when interest rates fall, Pang sees upside in this space.

He also flagged the currency angle: while most Asian currencies have rebounded to pre-conflict levels after the Israel-Iran war, the peso has lagged by “1-and-a-bit” per cent – offering what he called a “currency kicker”.

4. Chinese lidar on the rise

Lidar sensor adoption in Chinese cars is accelerating fast, with 15 to 20 per cent of cars sold this year expected to come fitted with lidar, said portfolio manager Dale Nicholls.

“That’s up from 5 to 10 per cent in 2024, and 1 to 2 per cent in 2023, so the growth is exponential,” he said.

Used in autonomous vehicles and self-driving functions, lidar – or light detection and ranging – is also expanding into robotics applications, such as autonomous vacuum cleaners.

Nicholls did not name specific stocks, citing company policy, though China’s top players in the space include Hesai Group and RoboSense Technology.