India is back in favour with global fund managers, moving to a mild overweight stance in Bank of America’s recent Asia Fund Manager Survey.
Why the Shift Matters
The survey, covering 119 respondents who manage about $293 billion, shows India climbing from the bottom of the list in August to a modestly positive outlook now. Investors see India as a way to diversify away from AI‑heavy markets in North Asia.
Key Survey Findings
- India is the third‑most‑favoured market in Asia‑Pacific, after Japan and Taiwan.
- China has slipped to an underweight rating as sentiment cools.
- Tech hardware, semiconductors, software, industrials and telecoms are the top‑overweight sectors across Asia (excluding Japan).
- Real estate, energy and materials remain out of favour.
India’s New Position
Fund managers now hold a net positive balance for India, meaning more are overweight than underweight. The country is viewed as a stable growth story that can balance portfolios that are heavy on AI‑driven stocks.
China’s Decline
Even though expectations for China’s economy have steadied, almost half of the respondents still see a structural downgrade for Chinese equities. Most expect easier monetary policy, but investors are waiting for clear policy action before adding more exposure.
Sector Themes Across Asia
Beyond India, the survey highlights strong interest in the AI and semiconductor cycle. In China, AI, internet and “anti‑involution” themes dominate, while green energy and travel are less attractive.
What This Means for Retail Investors
For individual investors, the mild overweight rating suggests that Indian stocks could provide steady returns and act as a buffer against the volatility of AI‑centric markets. Keeping a portion of your portfolio in Indian equities may help diversify risk while you watch other Asian opportunities.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.