A recent "Emerging Markets Investment Intention Survey" released by HSBC Holdings PLC reveals that global institutional investors are increasingly optimistic about the growth prospects of emerging markets, with particular enthusiasm for Asia's economic growth and equity market outlook. Chinese stocks have emerged as their preferred choice when investing in emerging markets.
The HSBC Holdings PLC survey indicates that global institutional investors' optimistic sentiment toward emerging markets has strengthened further. More than six in ten respondents (61%) believe emerging market equities will outperform developed markets, a significant increase from 49% recorded in the June survey.
Survey participants cited better growth prospects and lower inflation levels as factors driving their increased bullish expectations for emerging markets and their decisions to expand position sizes. Specifically, the proportion of respondents holding "bullish" views on emerging markets for the next three months surged from 44% in June to 62%. Meanwhile, the percentage of bearish investors dropped to 7%, representing a 50% decrease from June.
Most respondents anticipate that developing countries' economic activity will accelerate over the next 12 months, with Asia identified as the region expected to experience the fastest net growth acceleration and superior stock market prospects.
Among various emerging markets, Chinese stocks have become the top preference for global institutional investors. The survey shows that over half of the respondents expressed the greatest optimism toward mainland China's stock market prospects, substantially higher than approximately one-third recorded in the June survey. This reflects market confidence in China's economic stimulus policies and positive developments in China-US trade relations.
Regarding market risks, 28% of survey respondents continue to identify "tariffs and trade tensions" as the primary downside risk to emerging market prospects, followed by the possibility of recession in major economies, particularly the United States.
On the positive side, 33% of survey respondents consider "capital outflows from the US and reallocation" as the most significant catalyst for emerging market improvement, while 19% cite China's recent stock market rebound as a positive factor. Overall, China's economic growth momentum is viewed by investors as a crucial determinant of emerging markets' general direction.
Additionally, the survey reveals that incorporating sustainability factors into investment decision-making processes is essential for effective ESG risk management and innovation. According to the findings, sustainability is receiving increased attention in emerging markets, with 81% of respondents considering full or partial integration into their investment strategies, indicating a long-term trend.
The "Emerging Markets Investment Intention Survey" was conducted between August 4 and September 15, 2025, collecting insights from 100 investors across 100 institutions, with total emerging market assets under management reaching $423 billion.