India appears to have benefited the most from this change, given that its market experienced the highest swing in investor preference among EM peers.
Investor sentiment towards India makes an about-face, going from a net 13% UW to a net 44% OW, added the survey of EM and Asia fund managers. It also added that India and Indonesia are winning the Race to Surplus and are being rewarded by investors.
Investors maintained larger underweight on countries like Brazil and Turkey, which have failed to see substantial improvements in current account balances.
The poll for April showed that as expectations on China's growth rebounded from a nine-month low, investors cut their underweight positions. It also noted that although EM, as an asset class, is perceived as the most undervalued in 13 years, global investors are nowhere near an overweight position on them.
Sectorwise, investors maintained overweight positions on technology and discretionary space while ignoring late-cycle cyclicals.
Meanwhile, the global fund managers' survey showed that even as investors have tapered their extreme Q1 positions on EM & growth stocks, their overweight position on cash remain near a two-year high.