The chair of Aberdeen New Dawn Investment Trust has warned markets could be in for a shock if a US-China trade deal is further delayed.
Donald Workman said rising equity prices could easily go into reverse as his Asia-focussed company revealed it had outperformed its benchmark over the last six months.
He said: "Uncertainty will remain the watchword in the coming months. Markets appear to have already priced in an interim US-China trade deal, which means that any delays could trigger a painful reversal.
"It also seems clear that the strategic rivalry between the world's two largest economies will continue to play out, with unknown consequences for trade, investment, supply chains and the application of technology. This is likely to influence the growth trajectory of economies across Asia and dictate the quality of corporate earnings."
Aberdeen New Dawn continued to reduce its exposure to Hong Kong as it looked for better value on the Chinese mainland. The fund's total asset value dipped 0.6% to £344,576,000 over the period to 31st October, compared with the previous six months. Net asset value return for was 0.7%, compared with the 0.2% fall in the MSCI AC Asia Pacific ex Japan Index.
The unrest over citizens' rights in Hong Kong hit share prices of the Standard Life Aberdeen company's larger holdings.
Workman said: "Towards the end of the period, events in Hong Kong attracted increasing attention as large-scale street protests turned violent. The prolonged unrest hurt important pillars of the economy, including tourism, retail and property. Within the Company's portfolio, Jardine Strategic Holdings and Swire Properties were among the major laggards."
The company's overall outlook is positive, he said, as Asian governments and central banks increase investment and cut interest rates.
