Fund managers in Asia are expressing renewed confidence in the region’s markets, with sentiment improving toward China and record high allocations to Japan as revealed by Bank of America’s latest Asia Fund Manager Survey.

Key Insights from the Survey

• 84% of fund managers anticipate that Asia-Pacific equities (excluding Japan) will see an increase over the next 12 months.
• Equity allocations in China have reached a two-year high, indicating cautious optimism despite ongoing economic challenges.
• Japan emerges as the prime choice for investment due to strong corporate earnings and growth forecasts.
• Taiwan ranks second, while Indian equities received the least favor in two years.

Sector Preferences and Investment Themes

• AI and Semiconductors are the prevailing investment themes in China, achieving unprecedented popularity.
• Tech and Telecom stocks are gaining interest, contrasting with underwhelming results in real estate and materials.
• Infrastructure and consumption remain significant focuses for India.

Market Outlook and Implications

• China’s policy easing may attract more investment, with a third of respondents planning to amplify exposure.
• Japan’s sustained economic momentum keeps it amongst the most appealing investment hubs.
• The < strong>AI surge and semiconductor demand are increasingly informing fund managers’ strategies.

Relevant Financial APIs for In-Depth Insights

• Sector Historical API – Monitor sector-specific trends in the Asia-Pacific market.
• ETF Holdings API – Track fund flows and investor sentiment surrounding Asian equity ETFs.

Conclusion

Despite fund managers’ cautious outlook on China’s long-term recovery, their renewed enthusiasm coupled with robust allocations to Japan signals steady investment flows into the Asia-Pacific markets in 2024. Dominant investment themes in AI and semiconductors reinforce the projected tech-driven growth in the region.