Mark Mobius is now holding 95% of his fund’s holdings in cash amid growing concerns about a global trade war. The veteran investor also indicated on Wednesday that Indian stocks tied to software and electronics hardware were currently on his radar. Mobius expects the country to benefit at the expense of China as US President Donald Trump looks to reshape the global supply chains.
“Countries like India will be benefitting from what’s happened with China. Some of these emerging market countries will do quite well in this environment. But we have to wait until all of this evens out and we see a settling down of this uncertainty,” he told Bloomberg Television.
The veteran investor also noted that the US was very eager to make an agreement with India as it would be an “alternative to China”. The remarks came even as Trump assured that America would “have a deal with India” and Commerce Secretary Howard Lutnick said that the deal had already been “done” and currently awaited approval from New Delhi.
He however suggested that he would become “very bullish on China” if the US government showed a sea-change in its attitude on trade and domestic consumption. Mobius also said he owned “a little bit with S&P 500 funds” to track the market and expected the gauge to rise from current levels by the end of the year as investor confidence returns.
“Trump doesn’t want to see a big market crash, so he will be making adjustments and announcements, which will give a little bit more confidence for people in the market,” he added.
‘Cash is king’
Mobius revealed during the interaction that the bulk of his funds’ holdings was currently in cash amid global uncertainties. He opined that investors would likely be able to assess market opportunities only once the trade negotiations take place over the next four to six months. Mobius however added that he would will not hold so much cash for “more than three to four months” and would start to deploy some of the funds depending on opportunities.
“At this stage, cash is king. So 95% of my money in the funds are in cash. Right now, we’ve got to keep the cash and be ready to move when the time is right…If the market comes down further, of course we will put more money in,” said the co-founder of Mobius Capital Partners.