Money managers in Asia are deploying a range of traditional and unconventional strategies to cushion any losses as they brace for turbulence in the lead-up and aftermath of the U.S. presidential election.

Chinese equities feature high in some recommendations on expectations the vote will have a limited impact on Asian assets, while derivatives that protect against a market slide are also listed among the strategies. Several investors suggest more conventional hedges such as the yen and gold as well as just holding cash to avoid risk exposure.

And even as election fears ebb with polls showing a widening lead for Democratic candidate Joe Biden, a Bank of America Corp. survey showed global fund managers are ready for extreme market volatility as they expect the outcome to be contested.

“Global risk assets could experience near-term volatility as a disputed election could initially put downward pressure on them and cause a flight to safety,” said David Chao, market strategist for Asia Pacific ex-Japan at Invesco, which oversees $1.2 trillion globally. “A diversified portfolio makes sense, especially one that includes safe haven assets and market neutral strategies.”

“It seems rational to focus on Asia vs. the U.S. to reduce election risk” given the region’s strong earnings revisions, economic recovery and attractive valuations, said Thomas Poullaouec, head of multiasset solutions for Asia-Pacific at T. Rowe Price.

The region’s outperformance could continue in the short term, he added, after the MSCI Asia-Pacific index beat the S&P 500 index by more than 2 percentage points in September. The Asian measure is up 3.2% so far this month, tracking the 3.6% gain in the U.S. gauge.

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