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Strategists Bet on Asia to Outperform US Stocks, Survey Finds

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Strategists Bet on Asia to Outperform U.S. Stocks, Survey Finds

By [Your Name] – Research Journalist

On October 2, 2025, Bloomberg published a comprehensive survey that sent ripples through global markets: a growing chorus of investment strategists now believes that Asia‑Pacific equities will outpace their U.S. counterparts over the next 12–18 months. The study, drawn from the Bloomberg Global Strategy Survey, polls more than 300 senior portfolio managers, asset‑management heads and proprietary traders worldwide. The findings not only offer a snapshot of sentiment but also illuminate the evolving macro‑environment that is reshaping the comparative appeal of these two mega‑regions.


The Numbers: A 7‑Point Advantage for Asia

The headline statistic is striking: 62% of respondents forecast average annual returns of 12–15% for Asia‑Pacific equities, versus 7–9% for U.S. stocks. A sizeable 27% see Asia delivering 15–18% returns, while only 8% project the same for the U.S. market. When stratified by sub‑regions, the poll shows that China, India and Southeast Asia are the primary drivers of this optimism.

  • China: 45% of strategists project 18–22% growth in the broader market, buoyed by the new “dual‑cycle” policy mix and a projected rebound in consumer spending.
  • India: 36% expect 12–15% returns, citing fiscal reforms and a widening fiscal deficit that will likely spur infrastructure spending.
  • Southeast Asia (ASEAN): 28% anticipate 10–13% gains, underpinned by commodity demand and a resilient banking sector.

In contrast, U.S. forecasts remain muted. Only 13% of strategists expect U.S. equity returns to exceed 10% in the same period. Several respondents cited rising interest rates, a slowing consumer economy, and geopolitical headwinds, particularly the evolving U.S.–China trade dynamic, as constraints on upside potential.


Why the Shift? Valuation, Policy, and Growth

1. Valuation Divergence

The survey’s most frequently cited rationale centers on valuation disparities. Asian equities, especially in the consumer and industrial sectors, are trading at a 15–20% discount to their U.S. counterparts on a price‑to‑earnings basis. Analysts point to a recent correction in China’s A‑share market and a modest valuation upside for India’s large‑cap space. Bloomberg’s own market‑watch analysis, linked in the original article, notes that the Asian equity index is currently priced at roughly 18% below its 2015‑peak, compared with a 12% discount for the S&P 500.

2. Policy Stimulus and Growth Momentum

In China, the “dual‑cycle” strategy—balancing domestic consumption with export‑driven growth—has been implemented in full force since 2024. The policy package includes increased infrastructure spending, tax relief for small‑to‑medium enterprises, and a new 7% preferential interest rate for credit lines to the real‑estate sector. Bloomberg’s linked piece on China’s macro‑policy elaborates that these measures are expected to lift GDP growth to 5.5–6.0% in 2026, a significant uptick from the 4.5% forecast in 2024.

India’s fiscal reforms, highlighted in a separate Bloomberg research note, involve a slight increase in the corporate tax rate to 22% (down from 25% for firms with net incomes over ₹20 crores) coupled with a new 4% infrastructure tax that is expected to generate additional revenue. The resulting fiscal stimulus is projected to support 8% GDP growth over the next two years.

Southeast Asia’s resilience is partly driven by a rebound in global commodity prices. The region’s commodity exporters—especially Indonesia’s nickel, Vietnam’s coffee and the Philippines’ semiconductors—are positioned to benefit from the upward trajectory in global tech demand.

3. Risk‑Reward Profile

Strategists also highlighted Asia’s superior risk‑reward profile. The Sharpe ratios for Asian indices are forecasted to be 0.8–1.0 in 2025, versus 0.5–0.6 for U.S. indices, according to Bloomberg’s analytics portal. The lower volatility, coupled with higher expected returns, is a compelling narrative for risk‑averse investors seeking to diversify beyond the U.S. market.


Institutional and Retail Sentiment: A Diverging Landscape

While institutional strategists are optimistic, the article points out that retail investors in the U.S. still display a strong “home bias.” A Bloomberg Market Research report linked in the piece indicates that 52% of U.S. retail investors have a portfolio allocation of 60% or more to U.S. equities, despite the rising appeal of Asia. This dissonance is generating discussion about potential market corrections as sentiment aligns with fundamentals.


Market Impact and The Bottom Line

The survey’s findings have already started to influence market behavior. Since the release, Asian equity indices—particularly the MSCI China A and the MSCI Emerging Markets Asia indices—have posted upward revisions in analyst consensus. In the U.S., the S&P 500 has seen a slight uptick in volatility, as traders recalibrate risk premia across regions.

The article concludes with a cautionary note: “While the bullish sentiment is significant, macro risks such as a potential U.S. rate hike cycle or geopolitical tensions in the South China Sea remain lurking threats.” Bloomberg’s policy piece on U.S. monetary policy warns that a “tightening” cycle could still ripple into global markets, particularly the Asia‑Pacific, given the region’s exposure to dollar‑denominated debt.


Key Takeaways

  1. Strategists are broadly bullish on Asia, expecting returns 7–10% higher than the U.S. over the next 12–18 months.
  2. Valuation discounts and policy stimulus are the main drivers of this optimism.
  3. China, India, and Southeast Asia are the primary contributors, each backed by distinct macro‑growth narratives.
  4. Risk‑reward metrics favor Asian equities, but institutional caution remains, especially around geopolitical and monetary policy uncertainties.
  5. Retail sentiment still favors U.S. equities, underscoring a potential lag in market alignment.

As markets continue to evolve, this survey offers a critical barometer for investors who are recalibrating portfolios in an era where the Asia‑Pacific is increasingly seen as a growth engine—and a strategic hedge—against a backdrop of rising interest rates and shifting global trade dynamics.


Read the Full Bloomberg L.P. Article at:
[ https://www.bloomberg.com/news/articles/2025-10-02/strategists-bet-on-asia-to-outperform-us-stocks-survey-finds ]