Quality Asian stocks may underperform, says BlackRock

Singapore

IN the years since the global financial crisis, investors have piled into so-called "quality" Asian stocks - dominant companies with stable earnings and pricing power.

These companies have done well in an uncertain macroeconomic environment, even as "value" stocks - companies trading at low earnings multiples or at big discounts to their book values - have underperformed.

BlackRock's head of Asian equities Andrew Swan thinks these trends might start reversing.

"You need to be careful if you're a quality investor. High-quality stocks are expensive. Low-quality stocks are cheap relative to their history ... As global growth might start to stabilise, the premium people has paid f…