India-focussed portfolio outperforms amid broader Asia underperformance: GREED & FEAR report

Despite global headwinds, India continues to offer compelling returns to investors. According to the latest GREED & FEAR report authored by Christopher Wood, Global Head of Equity Strategy at Jefferies, India long-only equity portfolio launched in July 2021 delivered a robust 13.1% return in dollar terms in June quarter, outperforming the MSCI India Index which rose 9.7%.

The India portfolio has surged 96.1% gain since it was launched in July 2021, nearly doubling the 51.9% return of the MSCI India Index and comfortably ahead of the 48.4% rise in the benchmark NIFTY50 index.

In contrast, the long-running Asia ex-Japan thematic portfolio, which dates to 2002, saw a 7.3% return in June quarter, underperforming the 12.7% jump in the MSCI AC Asia ex-Japan Index. The underperformance is attributed primarily to the portfolio's lack of exposure to South Korea, which was the region’s standout performer, GREED & FEAR report noted.

With 40% of the portfolio allocated to India and 33% to China, the composition became a double-edged sword. While Indian equities in the portfolio surged by 12.8% last quarter, Chinese names fell by 3.5%, dragging overall returns. Meanwhile, Taiwan tech exposure has been trimmed from 14% to 8%, likely reflecting concerns over stretched valuations or geopolitical risks, report said.

Despite a subdued quarter, the Asia ex-Japan portfolio’s long-term performance remains robust with a gain of 4,036% since inception, translating to a 17.8% annualised return outperforming the MSCI Asia ex-Japan Index's 9.8% and S&P500’s 11.5% over the same period, the report highlighted.

The Japan absolute-return portfolio, launched in 2005, also posted a strong showing in June quarter, rising 11.3% in yen terms and 15.2% in dollar terms, outperforming the Topix’s 7.5% and 11.3% gains, respectively. The portfolio, which includes a mix of domestic demand and export-driven names, is up 429% in dollar terms since inception, versus 164% for the Topix, delivering a steady 8.6% annualised gain, GREED & FEAR report said.

Meanwhile, in the background of Asia’s mixed performance, US equities surged to record highs. The S&P500 has soared 28.8% since the tariff-driven low on April 7, boosted by retail buying and optimism around President Donald Trump’s tax-cut agenda. Yet, caution looms. With the July 9 tariff announcement approaching, market watchers fear President Trump may revert to protectionist rhetoric.