India most under-owned: BofA-Merrill Lynch survey

Weightage of Indian allocations has come down, net underweight now at 27%

Global fund managers continue to remain bearish on emerging markets, including India, while positioning themselves in favour of the recovering US economy. According to a latest fund manager survey by Bank of America-Merrill Lynch, allocations to India have further declined with the region now becoming the most under-owned among fund managers.

The survey said the weightage of Indian allocations had come down and was net underweight at 27 per cent.

Investor sentiments with regards to India have been on the decline for a few months now. According to the august Global Fund Manager Survey, India was already net underweight at 12 per cent. In comparison, allocation to China has risen to 27 per cent overweight.

“Asia-Pacific fund managers report a dramatic rebound in China allocation (from neutral to net 27 per cent overweight) in September, consistent with the stunning rebound in Chinese growth expectations,” said the fund manager survey report authored by Michael Hartnett and Brian Leung..

 

Among other emerging markets, fund managers have doubled their allocations to Russia as the outlook on the country’s equities turns bullish. A record 92% of emerging market fund managers were overweight on the region, the survey said. 

 

The report further said that fund managers were overweight on sectors like consumer discretionary, technology and healthcare. They had been underweight on the healthcare sector in the month of August. Financials, on the other hand, moved into the underweight category from overweight in the previous month.