Investment Rating - The report does not explicitly provide an investment rating for the industry [2]. Core Insights - Asia's international investment position has doubled to US$46 trillion over the last 13 years, with a significant portion allocated to US assets [5][8]. - The report discusses the ongoing debate regarding whether Asian investors should diversify their holdings away from the US, especially in light of recent USD depreciation [5][6]. - Concerns about the US macroeconomic outlook, including high fiscal and current account deficits, have led to increased discussions among investors about rebalancing their portfolios [5][6][7]. Summary by Sections Current Investment Position - Asia's gross international investment position (GIIP) has reached US$46 trillion as of Q1 2025, with US assets accounting for 41% of Asia's holdings [5][8]. - The securities portfolio within Asia's GIIP is valued at US$21 trillion, with US holdings slightly increasing to US$8.6 trillion in Q1 2025 [8][9]. Diversification Decisions - Asian investors face three key decisions: whether to diversify current US asset holdings, how much to allocate to the US from their annual current account surplus, and whether to hedge their positions in US assets [8][37]. - The share of US assets in Asia's securities portfolio has slightly declined from 41.5% in Q4 2024 to 40.8% in Q1 2025, indicating a potential shift in investment strategy [37][40]. Hedging Strategies - There has been a rise in demand for hedging among Asian investors, which has contributed to the strength of Asian currencies against the USD [54][55]. - Taiwanese life insurance companies have been observed to reduce their FX hedge ratios until Q1 2025, but there are indications of increased hedging activity in Q2 2025 [54][55].