According to the latest monthly global fund manager survey by Bank of America, the rationale for buying Chinese stocks is improving due to favorable factors such as the rise of AI startup DeepSeek, especially in Chinese tech stocks. This change may be enough to attract long-term investors back and signal a shift in global investors' mindset from "tradable" to "investable." BoA noted this is a significant turning point as large foreign investors typically decide whether to invest after months, or even years, and generally hold only small, short-term positions.
The survey was conducted between February 7 and 13 and encompassed 168 global asset management firms, managing a total of $401 billion in assets. The survey found that global fund managers' confidence in the Hong Kong stock market has notably strengthened, with the Hang Seng Index now expected to perform on par with the Nasdaq Composite, making it one of the best-performing markets. This year, the Hang Seng Index has risen by 14.5%, with tech stocks, in particular, showing remarkable performance, with the Hang Seng Tech Index surging 33% in a month.
BoA strategist Michael Hartnett mentioned in the report that many investors previously regarded China as a "trading market" chasing short-term rebounds, but now the fundamental investment outlook in China is improving, especially with long-term favorable factors like dividend growth and inflows from insurance companies. Analysts pointed out that investors are focusing on China's "top 10" tech stocks, which have surpassed even America's "Tech Big Seven" in certain areas.
The survey also showed that global equities have become the most favored asset class among investors, reflecting the strongest "risk-on" sentiment in 15 years. 34% of surveyed fund managers expect global equities to perform the best by 2025, with optimistic sentiment supported by strong economic growth and anticipated U.S. interest rate cuts.
Meanwhile, confidence in the European market is rising among investors, with some fund managers believing the Euro Stoxx 50 Index will outperform the Nasdaq 100 Index by 2025. This reflects shaken confidence in "American exceptionalism" and a reassessment of the European market. BoA's survey also indicates that global recession expectations have fallen to their lowest point in three years, and the Federal Reserve is expected to continue cutting rates by 2025.
Overall, investment sentiment in global markets continues to improve, especially in tech stocks and the Chinese market, indicating that investors are seeking new opportunities and high returns while adjusting their global asset allocations.
