Investors are looking beyond US equities for the first time in a decade amid a weakening US dollar and likely easing of US monetary policy, moving capital into Asia as they chase the artificial intelligence boom in the region, according to the head of global research at Bank of America (BofA).
Ahead of the three-day BofA Securities Asia Pacific Conference starting on Monday, Candace Browning said that US equities had been exceptional from the first half of 2020 to the end of 2024, attracting US$1.2 trillion from global investors, compared with US$200 billion for the rest of the world during the same period. However, the investments have slowed down this year.
“We see clients are diversifying away from the US into Asia,” Browing said in a written interview with the Post. “The stimulus potential is big, not to mention very real competition in the tech space. We see pockets of opportunity in Asia, and valuations offer a buffer compared to expensive US stocks.”
This year, investors have allocated evenly between US equity funds and international markets, with US$50 of every US$100 of inflows going to US stocks and the remainder to other global markets, she added.
“The falling US dollar and expectations of easier [Federal Reserve] policy in 2025-2026 have spurred sensible inflows to Asia equities, and more importantly [into] Asia debt funds,” Browning said.
With the AI boom in Asia, particularly in mainland China, the global AI market is expected to quadruple from US$300 billion in 2025 to nearly US$1.2 trillion by 2030, of which about US$1 trillion will potentially be deployed in Asia-Pacific, according to BofA.
