Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 12 to 14. Asia Fund Manager Survey In outperformers we trust Ten things fund managers are telling us 1) The new year is here but global narratives remain largely the same – an off-the-lows yet below-trend growth outlook for the world economy, with net 40% of the Global FMS panelists seeing a weaker economy in the next 12 months. Such is the conviction on the slowdown that 43% admit to being taken aback if growth in 2024 trumps that in 2023. 2) The relative optimism in the Asia FMS is also fading, with net 14% expecting the regional economy to strengthen in the next 12 months, down from 39% in August, as hopes of a growth revival in China die down. Japan, on the other hand, stands out. 3) From a market perspective, the Asia FMS expects a run-of-the-mill year, with a concentration of votes (47%) in the mid-to-high single digit band. Overall, 80% of investors look for a rise in Asia Pacific ex-Japan equities in the next 12 months, on the basis of improving profits and supportive policy against a backdrop of fair valuations. 4) Return expectations in Japan are even bolder, with more than a quarter anticipating double-digit returns in the next 12 months. It is, by far, the favorite market in the region, as cited by net 59% of investors, with a tilt towards semis and banks. 5) The FMS deems wage negotiations and BoJ policy normalization to be the most closely watched event in Japan this year, with 73% anticipating forex intervention at one level or another starting from 150. Meanwhile recent developments have made survey participants push out the timeline for an end to NIRP/YCC beyond the first quarter. 6) Pessimism in China is all but entrenched now. Chronic disappointment has turned investors away from Chinese equities, with 2 in 5 investors looking elsewhere for opportunities, given their belief that Chinese households will hold on to their savings rather than spend/invest (8%/2% of votes...
