As the possibility of a hard landing in China or a crash in commodity prices was seen as the biggest tail risk by investors, the net underweight on EMs stood at 15%, as per they January survey. Our global FMS shows that rarely have such bullish growth expectations been mixed with such bleak EM weightings, said a note by the brokerage.
The survey, however, highlighted that it may be a good news that the global emerging markets (GEM) are viewed as the most undervalued region globally. The survey noted that number of fund managers that termed profit outlook in EMs as least favuorable touched a record high. Separately, both, EM and Asia group of fund managers increased their underweight on India and Brazil while keeping an overweight stand on Russia among the BRICS markets.