Emmanuel Sharef, who oversees Pacific Investment Management Co.'s flagship Balanced Income and Growth Fund, spoke with Bloomberg about how the next leg of the artificial-intelligence boom could be concentrated in Asian stocks and beyond.
Wealthy clients in Taiwan, Hong Kong, Singapore, and mainland China have been piling into the $19 billion fund, which has outperformed 97% of its peers during the past three years.
The fund is underweight most hyperscalers and members of the Magnificent Seven as soaring AI capital expenditures increase debt loads, pressure free cash flow, spark credit concerns, and make already eye-popping valuations much harder to justify.
"We're underweight the majority of hyperscalers at the moment and we're underweight the majority of the Mag seven just given their high valuations," Sharef told the outlet earlier this week.
He continued, "You don't necessarily need to own the most expensive stocks to capture a particular theme or a particular market trend."
The 60/40 Balanced Income and Growth Fund has been moving further down the supply chain toward companies that build data center components and has become overweight in Asia, where it sees stronge
