Asia fund managers remain bullish on Japan, turn balanced on China- BofA survey

Asian fund managers remained largely bullish on Japanese stocks, a BofA survey showed, despite increased uncertainty over the country’s political and monetary policy outlook. 

Sentiment towards China was seen turning more balanced, as investors maintained calls for a stronger economy, but trimmed their enthusiasm over more stimulus from Beijing. 

The BofA survey, which covered 213 panelists with a total of $565 billion assets under management, showed Japan with the highest concentration of Overweight positions, at about 45% of respondents. The survey was conducted between 1-7 November. 

8% of respondents were Overweight on China, while 5% were Overweight on the Philippines and Taiwan, respectively. 

Japan remained the most preferred market in Asia, followed by China. On the flipside, 8% of respondents were Underweight on Australia and India, respectively, while 11% were Underweight on South Korea, BofA said. 

Still, the BofA survey showed sentiment towards Asia still remained relatively upbeat despite increased uncertainty over what a second Donald Trump presidency will entail for the region.

Trump has vowed to impose steep trade tariffs on China, as well as increase import tariffs on other Asian countries, presenting some economic headwinds for the region in the coming years. But traders were now waiting to see just how much of these tariffs will be imposed as Trump takes office next year. 

Japanese stocks remained in favor even as a late-October rally in the Nikkei petered out. BofA noted that investors had slightly trimmed return expectations in the latest survey, as profit expectations normalized and as Japanese valuations remained high.

Among sectors, BofA said “technophilia” remained in play among Asian investors despite a recent downturn among semiconductor stocks.

In China, investors remained biased towards artificial intelligence, chips, and internet stocks, especially as buyback and dividend plays gained traction.

Source: Investing.com