Paroda said EM prospects look supportive, with India and China expected to move in step after a phase of divergence. He noted that Indian valuations are easing and reforms such as goods and services tax (GST) have begun to reflect in sector performance. “I think a lot of the frothiness in Indian valuations is coming off,” he said, adding that autos could benefit as some sectors deliver mid-teens earnings growth.
Despite the constructive view, Allspring is cautious on globally linked areas. “We continue to be underweight, sort of Indian IT and Indian globally exposed pharma players for now,” Paroda said. India, he added, is no longer a market to buy in bulk. “India is going to be a very selective market. You can’t buy the entire index,” he said, pointing to financials and autos as areas with visible earnings paths. The firm remains slightly overweight India versus the benchmark, with a focus on financials.
In China, the fund is underweight overall but holds a clear tilt toward AI-related names, with no exposure to Chinese financials. The strongest conviction is in Korea, where Paroda sees gains linked to memory chips as AI demand reshapes pricing dynamics. “Korea, we are definitely overweight. We see the memory plays continuing to do well,” he said, noting that chipmakers now have greater pricing power even against large buyers such as Apple.
Allspring is also overweight TSMC in Taiwan, while staying slightly underweight the broader market due to exposure in other sectors.
On the US, Paroda expects momentum to continue into 2026, a midterm election year, after three years of gains. He said a key trigger could be fundraising by OpenAI. “If that happens, I do see continued sustained performance,” he said, referring to the prospect of large capital raising supporting AI-linked stocks.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
