Emerging market fund managers bullish on India

Asian fund managers go underweight

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Fund managers who invest in emerging market (EM) countries turned became more optimistic on India.

Interestingly, this comes even as fund managers with a mandate to invest in Asian countries chose to go underweight on India, according to an EM and Asia Fund Manager survey carried out by Bank of America Merrill Lynch.

“Global fund managers showed tapering signs of EM equity optimism this month, with a net 34% reporting an overweight position – down from 43%... optimism on Russia (net 67% OW), Indonesia (44%) and India (44%) improved notably,” said the report authored by Global Equity Strategist, Swathi Putcha; Chief Investment Strategist, Michael Hartnett; and Global Equity Strategist, Brian Leung.

“Asia investors showed little conviction in terms of regional allocations this month. China (net 9% OW) and India (5% UW) saw the biggest monthly drops,” added the report dated 19th March.

Interestingly, the report noted that global fund managers were further underweight commodities and resources, in a sign that ‘investors are skeptical about the EM story.’

A separate global fund manager survey authored by Michael Hartnett noted that investor perception of liquidity conditions is now the most favorable on record.