A recent Bank of America (BofA) poll reveals that global fund managers now view Indian equities as the 'least-favored' in Asia, replacing Indonesia. This negative sentiment is attributed to India's perceived lack of clear AI exposure and weaker growth expectations.
32%
Net Underweight Fund Managers
⏳ Time Machine
How today’s news fits into the bigger picture
2013
Taper Tantrum Causes FII Outflows
The mere hint of the US Federal Reserve tapering its quantitative easing program triggered significant FII outflows from emerging markets, including India, highlighting the sensitivity of Indian markets to global monetary policy shifts.
Mid-2010s
India's Reform Narrative Gains Traction
Under a new government, India embarked on several structural reforms (e.g., GST, demonetization) that, despite initial disruptions, were seen by many global investors as positive long-term drivers, attracting FII inflows.
Late 2024
AI Emerges as Global Investment Theme
Artificial Intelligence transitioned from a niche technology to a dominant global investment theme, with investors increasingly allocating capital to countries and companies perceived to have strong AI exposure and growth potential.
Early 2026
High Indian Valuations Raise Concerns
Some market analysts and global funds began expressing concerns about the high valuations of Indian equities, suggesting that future returns might be limited compared to other emerging markets.
August 19, 2026
BofA Poll: India Least Favored
A Bank of America poll showed 32% of global fund managers were net underweight on Indian stocks, citing concerns over AI exposure and growth, making India the 'least-favored' in Asia.
Today
A BofA poll indicated global fund managers now view Indian equities as Asia's 'least-favored,' with 32% net underweight.
What happens next?
Indian policymakers and companies will likely intensify efforts to highlight India's AI initiatives and address growth concerns to global investors, with market performance and FII flows as key indicators over the next 3-6 months.
A recent Bank of America (BofA) survey of fund managers has shown that Indian equities have displaced Indonesia as the 'least-preferred' stock market in Asia. The poll, conducted on August 19, 2026, indicated that a significant **32% of respondents were net underweight** on Indian stocks. Key reasons cited for this negative sentiment include India's perceived lack of clear exposure to the booming Artificial Intelligence (AI) sector, coupled with weaker-than-expected growth projections. This signals a shift in global investor preference and could impact foreign institutional investment flows into the country.
💭 If you're wondering…
Being 'net underweight' means a fund manager has allocated a smaller percentage of their portfolio to a particular asset, sector, or country than its weight in their benchmark index, reflecting a cautious or negative outlook.
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