By Chris Wood, the global head of equity strategy at Jefferies, has made significant adjustments to his Asia ex-Japan long-only portfolio. As part of these changes, he has exited his investment in Godrej Properties while increasing his stake in Macrotech Developers by one percentage point to 4 per cent.
“A new investment will be introduced in another Indian real estate firm, DLF Limited, with a 3 per cent allocation. Additionally, an investment in the Indian online travel platform MakeMyTrip will be included with a 4 per cent weight by removing the position in Axis Bank. The holding in Zomato will also be increased by one percentage point by reducing the exposure to TSMC,” Chris Wood stated in his weekly investor note, GREED & fear.
Within his India long-only portfolio, Chris Wood has bolstered his investment in Reliance Industries (RIL) by two percentage points. To fund this adjustment, he has trimmed his stakes in HDFC Bank and the State Bank of India (SBI) by one percentage point each.
As for his global long-only equity portfolio, Chris Wood has made a fresh investment in MakeMyTrip by eliminating his holding in Axis Bank. He has also exited Godrej Properties in favor of Macrotech Developers.
Indian Markets on an Uptrend
The Indian stock market has rebounded sharply from recent lows, with the Nifty 50 index climbing 6.6 per cent to approach the 23,600 mark. Among sectoral indices, public sector enterprises have led the rally, with the Nifty CPSE index rising 14 per cent over the period.
Meanwhile, segments such as energy, metals, PSU banks, infrastructure, oil & gas, and real estate have also performed well, with their benchmark indices surging between 8 per cent and 12 per cent in March, according to data from ACE Equity.
Shifting Focus: Reducing US Exposure in Favor of Emerging Markets
On a broader scale, Wood has recommended that investors sell into US stock market rallies and redirect their investments to other regions, particularly Europe, China, and emerging markets. He believes that the process of moving capital out of US equities has only just begun.
“The US market remains relatively expensive, while earnings growth there continues to slow. Meanwhile, positive earnings revisions are taking place in Europe, China, and even Japan. Additionally, the recent confirmation of auto tariffs set to be implemented on April 2—higher than expected at 25 per cent—poses a negative outlook for an already struggling automobile industry, especially for Japan,” Chris Wood observed.
Besides Chris Wood, other global fund managers are also reducing their exposure to US equities. A recent survey conducted by BofA Securities in March revealed that fund managers’ allocation to US stocks had dropped to nearly 23 per cent underweight, the lowest level since June 2023.
A net 44 per cent of global fund managers surveyed indicated that they expect economic growth to slow, marking a sharp increase from the previous month’s sentiment.
“US equity allocations saw a 40 percentage point drop in March—the largest monthly decline ever recorded. The current allocation is one standard deviation below its long-term average. Meanwhile, exposure to Eurozone equities surged by 27 percentage points month-on-month, reaching a net 39 per cent overweight—the highest since June 2021. Fund managers are now 20 per cent overweight in emerging market (EM) stocks, reflecting a 20 percentage point increase from the previous month,” BofA Securities stated.
The March survey included 205 fund managers overseeing a total of $477 billion in assets under management (AUM). Of these, 171 participants managing $426 billion responded to the global fund manager survey, while 107 participants managing $193 billion took part in the regional fund manager survey.
