9 months ago
India regains investor favor as China drops
India has become more popular among global investors.
In a recent survey by Bank of America, India is now seen as a good place to invest, while China is less favored.
Japan remains the top choice in the region.
More fund managers are investing in India compared to a few months ago.
This is because India offers a different kind of investment opportunity, especially when compared to countries focused on artificial intelligence.
The survey included many experts who manage a lot of money.
Earlier this year, India was the most preferred market in the Asia Pacific region due to positive trends in infrastructure and consumption.
Japan is also doing well because of its policies and the rising interest in banks and semiconductors.
Investors are optimistic but expect moderate returns.
India is now rated 'mildly overweight' in Bank of America's Asia Fund Manager Survey (FMS), regaining favor among global investors.
Japan leads in the region, with optimistic perspectives on Prime Minister Sanae Takaichi's policy influence.
China's rating has dropped to 'underweight' in the survey.
10% of fund managers are net overweight on India, up from 0% in November, making it the third most preferred market in Asia after Japan and Taiwan.
The survey involved 238 panellists with a total of $550 billion in assets under management (AUM).
- Who
- Global investors and fund managers
- What
- India regains favor as a mildly overweight allocation in the Bank of America's Asia Fund Manager Survey (FMS), while China drops to an underweight rating
- Where
- Asia, with a focus on India, China, and Japan
- When
- December survey
- Why
- India is seen as a diversification option against AI-driven markets, supported by a 'Goldilocks' environment of rising global growth and low inflation expectations across Asia, excluding Japan
Optimistic View
Cautious View
Market Performance
Optimistic View
India is seen as a good diversification option due to its 'Goldilocks' environment of rising global growth and low inflation expectations.
Cautious View
Investors expect moderate returns and are cautious about the market's volatility.
Key facts
- Survey Name
- Bank of America's Asia Fund Manager Survey (FMS)
- India's Current Rating
- Mildly overweight
- China's Current Rating
- Underweight
- Japan's Current Rating
- Leading in the region
- Fund Managers Net Overweight on India
- 10%
- Survey Participants
- 238 panellists with $550 billion AUM
- Global FMS Respondents
- 203 participants with $569 billion AUM
- Regional FMS Respondents
- 119 participants with $293 billion AUM
Timeline
India, US raced to seal trade deal by July.
Then, interim pact inked by late June.
US-China trade thaw boosted India's market confidence.
Investors' faith in India surged, thanks to strategic moves and easing tensions.
India now 'mildly overweight' in global investors' portfolios, Bank of America finds.
Quotes
Bhushan Kedar
Director of Fixed Income Research at Crisil Intelligence
“a key factor is the Indian rupee’s depreciation of over 5.5 per cent against the US dollar, which has reduced returns for foreign investors. Trade tensions have also played a role, with the US imposing a 50 per cent reciprocal tariff on India. In contrast, a weaker dollar has boosted returns in other emerging markets, such as Korea and Latin America.”
thehindubusinessline.com
“With domestic institutional investors (DIIs) emerging as net buyers in 2025, the market’s dependence on FPI flows has reduced, making it more resilient. While there are potential risks and uncertainties, India’s markets are well-positioned to navigate the challenges ahead.”
thehindubusinessline.com
Akshat Garg
Head of Research and Product at Choice Wealth
“Even if foreign participation remains selective, India is structurally better placed than in the past due to the growing depth of domestic capital, which provides a more stable foundation to the market.”
thehindubusinessline.com
“global capital gravitated towards markets such as the US, where a narrow set of large technology-driven stocks delivered outsized gains.”
thehindubusinessline.com
Sources
Indian equities deliver lowest dollar returns to FPIs in 2025
Apple, Nvidia to Tesla: Indian investors hold 8 global stocks on average — Check their top picks of 2025
Japan’s M&A deals boom, the global China+1 strategy, and why India is the big winner
India regains favour of global investors with ‘mildly overweight’ allocation as China drops: Bofa survey
India Regains Favour, China Slips: BofA Survey
$644 million inflows! FII buying swells to 2-month high last week — What's fuelling this rebound?
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