Institutional money managers are focusing on domestic consumption when it comes to Asian markets, with other themes like demand for commodities and infrastructure build-out taking a back seat.
Russell Investments senior research analyst Sarah Lien, who is based in Singapore, said financials stocks in Asia were looking particularly attractive.
She added that macro dynamics and company fundamentals in the Asian region were much stronger than those in the rest of the world.
"Those managers that are more focused on specific stock fundamentals are finding the market volatility very exciting. They're finding stocks that are being overvalued as people are focusing on problems in the US and Europe," she said.
However, Russell Investments chief investment strategist Andrew Pease said he had been watching the sovereign debt problems in Europe, and particularly Greece, with "increasing alarm".
There are huge institutional and political barriers in terms of getting effective bailout packages for Greece into place, Pease said.
"With Asia being a high-beta market, it would react quite heavily to a risk aversion event coming out of Greece," he said.
But if the European authorities acted quickly with a significant policy response, coupled with European Central Bank possibly acting as the "bond buyer of last resort", it would potentially create a market 'bottom' for Europe's economic woes.
"Provided we don't see an export collapse and a global recession of the type we saw after the Lehman collapse, then Asia is well positioned to be an outperforming market from that period onwards," Pease said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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