HSBC positions Asia as a prime destination for investors diversifying away from US-heavy portfolios, citing dynamic growth, strong domestic demand and supportive technology policies. The bank emphasises AI leadership, semiconductors and e-commerce, while favouring equities in Mainland China, Hong Kong, Singapore, South Korea and Japan, and preferring Asian financials and selected Chinese and Indian bonds for income.

Regional barbell of growth and yield

"As investors look to diversify US-heavy portfolios, Asia has every reason to be second to none – offering dynamic growth drivers, robust domestic demand, favourable technology and innovation policies, as well as attractive valuations."

"The region is home to many AI and technological leaders, semiconductor manufacturers and e-commerce champions, all of which are experiencing a turbocharged growth trajectory thanks to the unwavering global AI trend and government support through policy measures and fiscal spending."

"Mainland China is at the forefront of AI competition, with innovation identified as a key growth driver in its 15th Five-Year Plan. Meanwhile, Hong Kong is witnessing a revival in M&A activity and strong southbound inflows via Stock Connect. Corporate governance reforms undertaken in Japan and South Korea are also positioning companies to increase dividend payouts and share buybacks."

"Our barbell approach balances exciting growth opportunities with compelling dividend income from high-quality companies, alongside attractive bond yields in the region."

"We’re most positive on mainland Chinese, Hong Kong, Singapore, South Korean and Japanese equities. Within investment grade credit, Asian financials, Chinese hard currency and Indian local currency bonds are preferred."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)