GREED & Fear report: India remains a key part of Christopher Wood’s Asia investment strategy even though the market weighed on portfolio performance over the past year, according to the latest GREED & Fear report by Jefferies.
Despite the underperformance of Indian stock markets, Wood made it clear that India continues to occupy an important place in his long-term investment framework.
The veteran strategist acknowledged that his Asia ex-Japan portfolio lagged the broader benchmark partly because of an overweight position in India. However, despite that setback, he has maintained meaningful exposure to Indian equities through several prominent holdings spanning real estate, infrastructure, financial services, airports and power.
“This offers some consolation for now given the underperformance of this portfolio last quarter and indeed last year primarily because of too much exposure to India, though the long-term performance of this portfolio since inception at the end of 3Q02 remains for now an annualised 17.6% in US dollar terms on a total-return basis,” stated the report.
According to the report, the Asia ex-Japan long-only portfolio declined 8.8% in the previous quarter compared with a 1.1% decline in the MSCI AC Asia ex-Japan Index. During the previous year, the portfolio rose 14.5%, significantly below the benchmark’s 33% gain. Wood attributed a major part of that relative underperformance to excessive India exposure.
Indian stocks remain important contributors
Despite the acknowledgement that India hurt overall portfolio performance, several Indian stocks emerged among the strongest contributors to returns during the current quarter. The report highlighted strong gains in Lodha Developers, JSW Energy and GMR Airports, while PolicyBazaar-parent PB Fintech and Eternal also remained part of the portfolio.
Lodha Developers delivered a quarter-to-date gain of 26.8%, while JSW Energy advanced 18.8% and GMR Airports rose 18.6%. PB Fintech gained 5.3% and Eternal added 4.3% during the same period. These performances helped offset the growing dominance of technology and AI-linked stocks across Asian markets.
“The portfolio has risen by 19.4% so far this quarter in US dollar terms on a total-return basis, compared with a 23.1% gain in the MSCI AC Asia ex-Japan index, with the four Korean and Taiwan stocks contributing 17.6 percentage points of the gain.”
Wood noted that AI-related stocks in Korea and Taiwan have increasingly dominated regional market performance, creating a highly concentrated investment environment. While many investors have chased technology-driven gains, he expressed concern over the growing concentration risk associated with the AI trade.
At the same time, the strategist reiterated that global investors should closely monitor US Treasury yields, which he considers the most important price signal for financial markets. A sustained rise in yields could tighten liquidity conditions worldwide and influence capital flows across emerging markets, including India.
“GREED & fear continues to view the 10-year Treasury bond yield as the most important price in world markets. How it behaves is more important than what the new Fed Chairman says or the FOMC does,” added the report.
For Indian investors, the message from the latest GREED & Fear report is nuanced. While India has not delivered the relative performance Wood expected over the past year, he continues to hold significant exposure to Indian companies and has not abandoned his long-term conviction. Instead, the report suggests that global factors such as US bond yields, liquidity conditions and the sustainability of the AI rally may play a bigger role in shaping market returns in the coming months than country-specific considerations alone.
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