Power Play: Eye on China

Investors look at computer screens showing stock information at a brokerage house in Qingdao, Shandong province, China.
China Daily | Reuters
Investors look at computer screens showing stock information at a brokerage house in Qingdao, Shandong province, China.

Markets remain uneasy into the beginning of the second half of the year . Concerns over Greece and Puerto Rico are still top of mind for most traders, and China fears loom in the distance. Jack McIntyre, 5-Star Portfolio Manager of Legg Mason Brandywine Global Opportunities Bond Fund, thinks the global economy is too reliant upon monetary policy; what he calls a "liquidity trap."

He believes that global monetary policy is still extremely stimulative. "High quality bonds should still be part of investor portfolios over the long-term. Money will flow into Eurozone peripherals."

Elsewhere, Brandywine Globals' McIntyre thinks investors need to keep an eye on China's business cycle.

"China has the largest contribution to growth for the global economy. China moves the global growth needle more than any other economy. If growth in China improves global capital will gravitate to high yielding EM debt."

Legg Mason Brandywine Global Opportunities Bond Fund holds its largest non-benchmark exposures in Latin America (specifically Mexico, Brazil and Chile).

"Growth in US, Europe and China will trickle down into commodity producers and that is nowhere close to being discounted."