Glenn Freeman: In this week's Three Top Picks BlackRock's Charlie Lanchester is discussing Australia's growing brand presence within Asia, technology companies and the looming property price risk.

Charlie, thanks for your time.

Charlie Lanchester: Thanks. Thanks for having me.

Freeman: Now, Charlie, talking about the three themes that you are quite interested at the moment, and one of those is the Asian markets and Australian companies moving into that sector or that region. What's your take there?

Lanchester: Yeah. Look, we are obviously very positive about the long-term growth story in Asia and we are plugged into our team up in Hong Kong who give us very good access and views into that market. And look, we do believe that brand Australia is on the rise and will continue to rise. And you've seen a couple of names do particularly well over the last year or so around infant milk formula, for instance. There's also been a well-known wine company which has done exceptionally well. And we think some of those themes will continue and we are looking to play those in a conservative manner. I mean, I think, also Australia as a tourism destination will continue to increase with visitors from around Asia and again, we are trying to find ways to play that theme as we move forward.

Freeman: The other thing that you are touching on is technology. Now, it's something that for Australian shareholders, getting access to sizable technology companies, I would have thought that's something that's quite challenging. But you've got sort of quite a different view there; there's quite a room to grow there?

Lanchester: Yeah. Look, we are very excited about the technology sector. I mean, obviously, it's a broad, very broad term when you say technology. I mean, it's affecting every company to some extent in the ASX 300. But what we are more excited about is some of those smaller companies that are now starting to come through. I mean, we have seen Atlassian list and go to a very high valuation over in the U.S. on NASDAQ. But I think more companies will list here and obviously, Xero, is one of the larger ones. WiseTech has been very successful. We think there's going to be more of these businesses.

When you look back 10 years, the healthcare sector was a very small percentage of the ASX 300. It's now, I think, over 10 per cent. We believe that that technology sector in 10 years' time will be something similar. Indexes are by nature backward-looking. They reflect the companies that did well in the past. And so, we are very focused on trying to uncover some hidden gems in that technology space. And I think it's clear that you can now start a good successful business here in Australia. You don't have to go to Silicon Valley. And the venture capital ecosystem here is alive and well and I'm starting to see we can see some good companies that will come through and hopefully list on the ASX 300 in the next few years.

Freeman: And lastly, an area that is of interest to all investors and it's something that grabs the headlines on a regular basis is the property space. What's your take there in terms of the stocks that you buy?

Lanchester: Well, look, we are watching that space very, very closely. I mean, I think it's probably the biggest risk out there at the moment in terms of, I think, it is different this time. In the past, we have seen modest downturns in property prices which have then led to further price appreciation as banks have continued to lend quite large amounts and interest rates have continued to fall. But I think interest rates from here will not fall much further. We are starting to see bank funding costs, for instance, tick up at the moment. And on the back of the Royal Commission and a few other factors we are seeing banks tighten up their lending mechanisms, which all things being equal will lead, I think, to a softening of the property market. Whether or not that turns into a more robust downturn remains to be seen. But certainly, that is something we are watching very closely.

Freeman: Great. Thank you very much for your time.

Lanchester: Thanks for having me.