Emerging markets: Rethinking allocations to equities and fixed income
Webinar: Watch the full replay below and explore what's next
On 23 September 2026, we held a webinar featuring Shamaila Khan, Head of Global Emerging Markets and Asia-Pacific Fixed Income, Urs Antonioli, Head of Asia & Emerging Market Equity and Massimiliano Castelli, Head Global Sovereign Markets Strategy and Advice, where they analyzed recent developments in emerging-market equity and fixed income.
As a result of growing global uncertainty around equity valuations as well as divergence in monetary policy and business cycles, investors are starting to rethink their asset-allocation strategies – and emerging markets can play an important role within a diversified portfolio.
10 key highlights from the discussion:
10 key highlights from the discussion:
- Traditional distinctions between developed and emerging markets are evolving.
- In comparison with developed countries, many EM economies have exhibited resilient growth as well as disciplined policy mixes and strong sovereign balance sheets. Conversely, some forecasts suggest US government debt is on course to exceed 140% of GDP by 2031.
- In terms of fixed income, there have been no defaults by EM countries since 2023, while EM corporate defaults are also trending lower.
- The backdrop for hard-currency EM debt reflects attractive yields, improved policy credibility, limited net issuance and positive capital inflows. The asset class has demonstrated considerable resilience during the market turbulence of the last 18 months.
- EM equity markets are exposed to a number of potentially supportive drivers, including corporate performance, discounted valuations and exposure to a number of long-term structural drivers.
- Key sources of growth include AI and the global semiconductor supply chain, as well as China’s innovation ecosystem and opportunities related to demographic change and digitalization in India.
- Forecasts suggest that corporate earnings growth across EM – in Latin American and emerging Europe as well as Asia – could be substantially higher in the short to medium term than in developed markets.
- There are a number of potential headwinds for EM, including appreciation in the US dollar, ongoing conflict in the Middle East and a possible slowdown in AI investment.
- Active investment approaches may help investors navigate these risks while seeking opportunities across fixed-income and equity markets.
- EM debt and equities may offer diversification benefits relative to concentrated exposure to developed markets.
Watch the webinar below.
To dive deeper into the evolving dynamics of this topic, find out more about our capabilities in emerging markets.
Risk considerations: Investments in emerging-market equities and debt are subject to market, credit, liquidity, currency and geopolitical risks and may result in losses; there can be no assurance that investment objectives will be achieved, and past performance is not a reliable indicator of future results.
