Kai Lam on BNN Bloomberg: Finding Opportunities in International Equities Amid Trade Tensions
In this BNN Bloomberg interview, Kai Lam, Chief Investment Officer at JCIC, discussed how slowing economic growth and escalating trade tensions were affecting international equity markets.
With uncertainty surrounding U.S.–China trade negotiations, Brexit and economic growth in Europe and Japan, Lam explained why broad geographic calls had become less useful. Instead, the investment team was taking a more selective approach—managing risk while looking for individual companies capable of improving their businesses even in a challenging economic environment.
Managing Risk During an Uncertain Global Outlook
At the time of the interview, Lam said JCIC had adopted a more neutral position toward international markets, increased defensive portfolio components and raised some cash.
The team had also reduced some of its exposure to China as trade negotiations became more uncertain. While JCIC continued to hold companies with Chinese exposure, Lam explained that the changing environment required the investment case for each company to be reassessed.
His central point was that market volatility does not automatically make a company more or less attractive. The important question is whether new economic or political developments have materially changed the long-term investment thesis.
Learn more about JCIC’s approach to active portfolio management through changing market cycles.
Looking Beyond the Broader Economy
Lam emphasized the importance of finding companies with what he described as “self-help opportunities”—businesses that could improve their results through actions within their own control rather than relying entirely on stronger economic growth.
He discussed SAP as one example. Although Germany’s economy was struggling at the time, the company was restructuring, reducing costs, improving margins and benefiting from customers moving toward cloud-based applications.
JCIC was also favouring European companies with significant operations outside their home countries. This provided access to international businesses without making portfolio results entirely dependent on the economic performance of one region.
That company-specific focus reflects the importance of examining business quality, valuation and a changing outlook before making an investment decision. Learn more about how JCIC selects and evaluates investments.
For a more current look at the role global exposure can play in a diversified portfolio, read The Benefits of International Equity Investing.
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