Fund managers across Asia are showing renewed confidence in regional markets, with sentiment on China improving and allocations to Japan at record highs, according to Bank of America's (BofA) latest Asia Fund Manager Survey.

Key Takeaways from the Survey

• 84% of fund managers expect Asia-Pacific equities (excluding Japan) to rise over the next 12 months.
• China's equity allocations hit a two-year high, signaling cautious optimism despite ongoing economic concerns.
• Japan remains the top choice due to strong corporate earnings and economic growth prospects.
• Taiwan ranks second, while Indian equities saw the lowest support in two years.

Sector Preferences & Key Investment Themes

• AI & Semiconductors are top investment themes in China, reaching a survey-high preference.
• Tech & Telecom stocks saw rising interest, while real estate and materials lagged.
• Infrastructure and consumption remain key focuses in India.

Market Outlook & Implications

• China's policy easing could drive further inflows as a third of respondents plan to increase exposure.
• Japan's ongoing economic momentum keeps it an attractive investment hub.
• The AI boom and semiconductor demand continue to shape fund managers' strategies.

Relevant Financial APIs for Deeper Insights

• Sector Historical API - Track sector-wise trends in Asia-Pacific markets.
• ETF Holdings API - Monitor fund flows and investor sentiment on Asian equity ETFs.

Conclusion

While fund managers remain cautious about China's long-term recovery, their renewed interest in the market, coupled with strong Japanese allocations, suggests Asia-Pacific markets could see steady inflows in 2024. AI and semiconductor plays remain dominant investment themes, reinforcing the tech-driven growth outlook for the region.