The shares of the top 300 listed Asian companies based on their net cash levels have risen about 9% this year, according to Refinitiv data, compared with the MSCI Asia Pacific share index's 4.6% gain.

"Cash implies safety amidst the volatility we have seen to start the year, said Vikas Pershad, investments portfolio manager for Asian Equities at M&G Investments.

"It is understandable that investors would be allocating more capital to companies with above-average cash balances, and would be taking capital away from companies with heavy balance sheets," he said.

A balance sheet buffer can offer protection against rising borrowing costs and be a ready source of funds for buybacks, dividends or investment in future growth and can come in handy as rates go up and markets turn fickle and jittery.

"A healthy balance sheet is a prerequisite for us," said Pershad.

Cash levels do not necessarily drive stock performance alone, though strong balance sheets have enhanced the appeal of shares in companies such as China Mobile, Samsung Electronics and TSMC since the start of 2023.

China Mobile is up 37% this year as investors like its high dividends and growth potential. Chipmakers Samsung Electronics and Taiwan Semiconductor Manufacturing Co also hold high cash and have been rebounding on hopes that chip demand will pick up.

By contrast Asia's top 300 holders of net debt, about a quarter of which are real estate firms, mostly in China's beaten-down property market, have risen just 0.2% this year.

Nomura said Asian investors could find insulation from recession risks by looking for cash-rich companies likely to be able to sustain dividends or buybacks even in tough times.

For Nomura, such a strategy, which the brokerage calls BCD or buybacks, cash, and dividends, has outperformed the MSCI Asia Pacific index by 60% since the index's inception in May 2019, it said.

There are signs it is a popular theme, with the Global X Asia Pacific High Dividend Yield ETF, which invests in companies that provide high and stable dividends, up 6.6% this year.

Even though March brought the steepest bond rally for years, something that usually supports growth stocks as yields become less attractive, BNP Paribas' Asia-Pacific head of equity research, Manishi Raychaudhuri, sees safety commanding a premium for a while yet.

"Our search for deep value now takes us to stocks that have more net cash on their balance sheets than their market cap," he said.

(Reporting by Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru: Editing by Tom Westbrook and Susan Fenton)

By Patturaja Murugaboopathy and Gaurav Dogra