There seems to be varied preferences over equities depending on whether investors are based in Asia or the US, according to views gleaned from William Bratton at BNP Paribas.

As a number of wealth managers are increasing their exposure to emerging markets, William Bratton, head of cash equity research, APAC, at Paris-headquartered BNP Paribas, highlighted that US investors were net buyers of Asian equities in the fourth quarter of 2025.

US investors are continuing to buy Asian equities – overall they prefer Japanese and Taiwanese equities, Bratton said in a note. However, they are adding in both Hong Kong/China and India incrementally into the year-end, though not at a scale suggestive of large-scale capital reallocations.

Asian investors are also continuing to buy US equities in volume but at a slowing rate. Current buying is concentrated in Singapore and South Korea, Bratton continued.

The statement – following new data from the US Treasury’s International Capital (TIC) system released in February – shows that US investors remained buyers of Asian equities in the fourth quarter of 2025, making $9 billion of net purchases over the quarter. This took their total 2025 purchases of Asian equities to $80 billion, of which $35 billion (44 per cent) went to Japan, $15 billion to China/Hong Kong, $12 billion to Taiwan, $11 billion to South Korea, $5 billion to India, and $2 billion to southeast Asia.

However, these annual totals mask some more recent trends in terms of US investor behaviour. The fourth quarter of 2025 saw a pick-up of their interest in India, Taiwan, and southeast Asia, while their interest in Japanese equities slowed into the year-end, Bratton said. South Korean equities saw the single largest one-month inflow in December from US investors in more than three years – although this served to balance out the earlier net selling in October and November. Finally, US investors were net buyers of Hong Kong/China equities in the second half 2025 and fourth quarter of 2025 – a reversal of the second half of 2024 and first half of 2025 selling – but at a small scale, reflecting Bratton’s view that large-scale capital reallocations to the country are yet to be seen.

Nevertheless, total US holdings in Hong Kong/China equities reached $415 billion as of end-2025, up on the $280 billion at the start of 2024, the data shows. These holdings are also less than the $250 billion held by US investors in Japan and the $668 billion in Taiwan, as of end-2025. Total holdings of Asian equities by US investors closed end-2025 at $3,624 billion.

Asian investment in US equities
Asian investors remain large buyers of US equities with more than $128 billion of net purchases in 2025, Bratton said. However, this buying slowed in the second half of 2025 with $23 billion of US equities bought by Asian investors in the fourth quarter of 2025. This resulted from the declining interest in US equities by Japanese investors through 2025 – they net sold $30 billion of US equities in the fourth quarter of 2025 with three months of consecutive selling.

In contrast, Singapore investors bought $30 billion of US equities in the fourth quarter of 2025, taking their total purchases to $79 billion in 2025. South Korean investors [bought] a further $21 billion in the same quarter, taking their total 2025 net purchases to $71 billion. Chinese and Hong Kong investors have turned net buyers of US equities in the fourth quarter of 2025 after their previous selling seen through much of 2023, 2024, and the first half of 2025, Bratton continued. Given these dynamics, Asian investors ended 2025 holding $3,795 billion in US equities, of which Japan accounted for $1,268 billion, Singapore for $894 billion, and South Korea for $649 billion.

Bratton’s view is that the global financial system will fragment and become more regional over the longer term. But this is a long-term process and in the near-term, Asia’s relationship with the US public equity complex remains substantive – both as a source of capital and as an investment destination, Bratton said. US holdings in Taiwan and Japan, for example, account for 23 per cent and 15 per cent of their total market caps, respectively. Conversely, the South Korean holdings of US equities represent 18 per cent of the country’s total domestic market cap, while Singapore’s holdings of US equities are now greater than its domestic market cap – although Bratton believes that the Singapore total is exaggerated by its regional custodian role with the possibility that Chinese buying is routed via the city-state.

The scale of these holdings – in both directions – creates potential risks if sentiment were to turn and the capital flows were reversed, Bratton said. But he views recent flows as supportive for the region’s equity markets with continued interest in both directions.

The research comes when a number of investment managers are positive about emerging markets this year. Paris-based asset manager Carmignac, for instance, recently said that emerging market equities, notably tech, remain undervalued compared with the US. The firm, which is overweight in emerging markets, believes that their outperformance of developed markets will continue in 2026. Benjamin Melman, global chief investment officer at Paris-headquartered Edmond de Rothschild Asset Management is also increasing his exposure to emerging markets. See more coverage here and here.