Investor sentiment across Asia has sharply deteriorated, with fund managers bracing for an economic downturn both regionally and globally, according to Bank of America’s (BofA) April Asia Fund Manager Survey.
Pessimism at Post-COVID Highs
Conducted between April 4 and 10, the survey reveals:
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89% of respondents expect weaker Asian economic growth.
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82% anticipate a global slowdown in the months ahead.
These readings reflect the most bearish sentiment since the pandemic and mark a second straight month of negative shifts in outlook.
Collapsing Profit and Return Expectations
Confidence in corporate earnings is rapidly fading:
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78% of fund managers expect a deteriorating Asian profit cycle.
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Most believe current consensus earnings remain too optimistic.
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Return expectations have turned negative for the first time since October 2022, with analysts noting that investors see little to no valuation support at current market levels.
China Outlook Reverses Again
After showing signs of optimism in March, sentiment towards China has flipped:
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58% of fund managers now foresee economic weakening in China over the next 12 months.
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Despite ongoing monetary easing, structural bearishness on China is at a survey high.
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Capital preservation remains the top priority for Chinese households, undermining any near-term recovery narratives.
Japan and India: Still Favored, But Caution Rising
Japan, while still the top regional pick, is not immune to pessimism:
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26% of respondents now expect Japan’s economy to weaken.
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Return expectations and market optimism for Japan have hit record lows.
India regained its position as the second most favored market, overtaking others despite global uncertainties.
Thailand and China, by contrast, are now the least preferred markets among surveyed investors.
Market Drivers to Watch
According to BofA analysts, investors are laser-focused on:
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Currency trends and foreign exchange volatility
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Policy shifts from the Bank of Japan
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Corporate governance reforms in Asia-Pacific markets
Data Sources for Further Insights
To track economic indicators and sentiment trends:
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Economics Calendar API: Monitor macro data that shapes investor sentiment and monetary policy moves.
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Key Metrics API (TTM): Analyze valuation trends and fundamentals across Asian equities.
Final Thoughts
As fund managers grow increasingly cautious, the message is clear: macro headwinds, earnings uncertainty, and geopolitical tensions are weighing heavily on Asia’s investment landscape. While Japan and India remain relatively resilient in investor portfolios, sentiment overall is moving toward capital preservation rather than risk-taking.
