Emerging markets (EM) include countries that span the whole gamut of policy quality, growth dynamics and political cycles, leading to a diverse and dynamic investment universe. Many EM countries currently have stronger monetary credibility, healthier balance sheets and better inflation control than some developed markets. EM investment opportunities span multiple return drivers from domestic consumption and digitalization to sovereign credit reforms and local interest rate cycles.
Key points
Growth in emerging markets GDP over the last few years has been stable at around approximately 4% growth despite slowdowns in China and US growth in the past year- Post the pandemic in 2020, EM central banks, in general have done a better job of controlling inflation by hiking interest rates
- While EM markets saw outflows in 2022, 2023 and 2024, data from JPMorgan showcases the turnaround in flows across EM equities and EM fixed income with FY2025 inflows of USD 63 billion
- EM hard currency sovereign and corporate debt outperformed similarly rated US corporate debt in 2025
