Robeco Sees Sustained Volatility in South Korea Stock Market Amid High AI Exposure, Low Valuations

According to Robeco, South Korea's stock market will experience sustained volatility in the coming months due to high artificial intelligence exposure, while equities remain undervalued relative to earnings, the global asset manager said on July 14 at a briefing in Seoul. Joshua Crabb, Robeco's Asia-Pacific equity chief, noted that Asian markets trade at low valuations compared to earnings, particularly versus the U.S., despite rising corporate profits. Crabb stated Asia retains significant upside potential for "re-rating," as valuations have not kept pace with earnings growth. To manage volatility, Robeco recommends broadening portfolios beyond AI and semiconductor sectors into undervalued areas with dividend stories and earnings growth, rather than reducing AI exposure entirely. Chris Burkart, Robeco's global equity portfolio manager, attributed current volatility to extreme price momentum, noting the need to monitor earnings outlooks closely. Burkart emphasized this may be an opportune time to shift away from the most-loved technology stocks and identify yet-undiscovered investment opportunities across the broader market.
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