Asian equities continued their outperformance of other global markets in September, extending a remarkable recovery from the shortest bear market on record. This reflects an equally impressive rebound in economic activity, but most countries are still operating below full capacity and the initial snap-back is likely over. Is now the time to reduce risk in portfolios?

There’s certainly no need to panic. Fidelity’s proprietary GEARs (Gauges of Economic Activity in Real Time) indicator for Asia’s largest economies continues to rebound strongly. The China GEAR has been in positive double digits for a third consecutive month, implying that GDP is comfortably above its pre-health crisis peak.

But some recent economic data are pointing to slower gains ahead for the region.

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