Rate cuts no cure, says Asian fund manager who beat 98% of peers

Lee's comments come as investors weigh how to react to a wave of monetary easing by central banks across the world, pushing bond yields to new lows amid fear of a global recession

Asian equity markets may face further turbulence down the road as a series of rate cuts in the region are unlikely to shore up economies, according to a top-performing fund manager.

King Fuei Lee, who co-manages the Schroder Asian Total Return Fund, says there’s a risk of long-term deflation because monetary policy hasn’t stimulated investment and consumption. The impotence of central banks mostly stems from structural problems including demographic issues, income disparity and excessive debt, he said.

“If long-term economic growth continues to be poor, it’s difficult to see what’s going to sustain markets at this valuation,” said Lee, whose fund has