L&G Asset Management sees AI equity upside despite US$3 trillion debt concerns

Core Insights - L&G Asset Management sees opportunities in the AI sector despite rising debt issuance, with potential credit growth of US$500 billion to US$800 billion annually, reaching nearly US$3 trillion by 2030 [1][5] Investment Strategy - The firm is defensive in its allocation to the AI sector, managing approximately US$1.5 trillion in assets [2] - Bennett expresses concern about the supply of AI debt issuance but does not perceive an AI bubble, citing strong earnings from major tech companies [5][4] - Tactical opportunities in bonds are anticipated, but the firm plans to wait for the right timing [6] Market Trends - Major fundraising activities are expected in the AI sector, with Meta, Google, and Oracle collectively raising over US$70 billion soon [3][4] - The tech theme is predicted to dominate Asian equity markets next year, with a preference for US stocks over Chinese stocks due to better revenue translation into share price appreciation [6] Performance Comparison - Hong Kong and mainland Chinese stock benchmarks have outperformed US indices, with the Hang Seng Index up 33% and the CSI 300 Index up 20% this year, compared to a 17% gain in the S&P 500 [7]