India plays both anchor and ATM for Asia investors: Manulife’s Marc Franklin

India remains a long-term favourite for global investors, but in the near term, it often ends up funding their trades elsewhere in Asia, says Marc Franklin, Deputy Head of Multi-Asset Solutions for Asia at Manulife Investment Management.

In a conversation with CNBC-TV18, Franklin said India offers quality growth and remains a “core holding” for many regional and global portfolios. But when investors find tactical opportunities in other markets like Korea or China, they often trim positions in Indian equities to reallocate funds. “It kind of serves as an ATM,” Franklin said, adding that the market is still seen as a safe and strategic bet for the long haul.

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He also pointed out that while India’s growth outlook is among the strongest in Asia, valuations remain a constraint for fresh flows. “To some extent that’s discounted in valuations,” he said, but noted that the Reserve Bank of India’s room to cut rates could provide support for the cyclical outlook and bank loan growth.

Franklin remains constructive on Asia overall, although he stressed that equity markets are navigating many moving parts — from liquidity conditions to US fiscal policy and the ongoing tariff uncertainties.

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On US bonds, he flagged the rising fiscal deficit and concerns about long-term sustainability, saying it could lead to further steepening of the yield curve. However, he added that any signs of economic slowdown could revive demand for bonds, especially with 10-year yields trading at attractive levels recently.

Despite the global uncertainty, Franklin believes that if macro conditions hold, risk assets like equities could continue to do well.