(Yicai Global) Feb. 24 -- US investment management giant Neuberger Berman, which is getting ready to open the country’s second public mutual fund run by a foreign asset manager after being granted a coveted license last year, has set its sights on rich pickings in the mainland stock markets.

While overseas central banks are tightening their monetary policies, China’s policies are relatively loose and will support the value of the mainland bourses, Meng Ning, equity investment director of Neuberger Berman China, told Yicai Global.

The US Standard & Poor's 500 index’s price-to-earnings ratio is over 20:1, close to a historic high, Meng said. Yet the P/E ratio of China’s CSI300 Index is around 13:1. It is widely predicted that the US’ Federal Reserve will hike interest rates four times this year and tighten liquidity in the US capital markets, so investor panic will intensify, he added.

Neuberger Berman’s first public fund in China will stay moderate, with balanced allocations in leading firms in various industries and no preference to certain sectors, Meng said. The investment portfolios Meng runs tend to maintain a low turnover rate of 30 percent, he said. He views a reasonable valuation as an important criterion.

"I hope to stick to what I have been doing even if future funds target local Chinese investors. It is true that growth stocks’ net value, scale and performance climb rapidly in the short term, but big ups are often followed by big downs. You must choose a style that suits you to stay in the market for the long run," Meng said.

China has been tightening regulation in the internet-based sector since last year, causing stock prices of leading internet firms to fall greatly. Neuberger Berman began bargain hunting at the end of last year, Meng said. The P/E ratio of some internet titans is nearly 20:1, showing they are worth investing in. While the crackdown might hamper internet firms’ business in the short run, they will bounce back in a year or two, he added. The New York-based company is willing to buy in and hold for the long run to wait for the market to recover, he added.

Neuberger Berman’s other investment managers might issue themed funds at a later stage to meet the preferences of Chinese investors, Meng said.

BlackRock, which was the first foreign asset manager to be issued a public fund license, has opened a Chinese mainland fund and a Hong Kong fund. The UK’s Schroders as well as the US’ VanEck and AllianceBernstein Holding are also applying for public fund licenses.

Editors: Dou Shicong, Kim Taylor