The Economic uncertainty in the US With inflation and tariffs it has led numerous investors to bet on the Weakness in Wall Street and boo Good streak in emerging marketsaccording to Vinicius Andrade and Matthew Burgues in Yahoo Finance.
This change is promoted by the expectations that the tariff policies of President Donald Trump will include American growth and force investors to look abroad, a bet that has led the portfolio managers to acquire all kinds of assets, from Latin American currencies to Eastern European bonds.
These movements have already caused an increase in the equity of emerging markets, with an indicator that is headed for its best first quarter since 2019. The depreciation of the dollar has contributed to boost the index of development currency in development almost 2% this year, while local bonds have also risen.
«In recent years, investors have invested massively in American assets and more developed markets,» he said Bob Michele, Global Fixed Income Director of JPMorgan Asset Management. «Now, when analyzing the valuations, the emerging markets seem cheap.»
Investors in emerging markets have experienced a good dose of false hopes in the last decade, since the rise in US actions left competition back again and again. More recently, the yields of the highest treasure bonds in decades gave investors few reasons to venture outside the US. And caused an increase in the dollar that fagged the coins around the world.
The future of the current rebound could well be linked to The trajectory of American growth. A cooling of the largest world economy, induced by tariffs, that makes the yields of the treasure bonds fall and the dollar would be ideal, as long as it does not become a more pronounced deceleration that eliminates the appetite for market risk, according to investors. Many also have a massive impulse of European expenditure and a greater stimulus in China to compensate for the fall if the US failed.
Optimistic investors also point out that the assets of many countries are cheap according to various metrics, and that the actions of developing countries are close to their lowest level in relation to the S&P 500 since the late 1980s. The net assets of assets in dedicated funds have not yet been positive in 2025, and the emerging markets are inferred in many portfolios after years of low performance. This could give margin of appreciation to actions, bonds and currencies if the change accelerates.
«The end of American exceptionalism still has a long way to go,» wrote the Ashmore Group analysts Earlier this month. «It is likely that this change in asset allocation is a trend that extends for a decade, considering the enormous overexposure of global investors to US variable income.»
Touring the world
Edwin Gutiérrez, Director of Sovereign Debt of Emerging Markets at Aberdeen Group PLCHe said that during the last decade and a half, investors have been «waiting in vain» to a scenario in which US growth slows down, but not so drasticly as to generate risk aversion.
Even so, he has been buying bonds and currencies from emerging European countries, after years of maintaining allocations to the region below the reference weights of the firm.
«Trumponomics probably represents the greatest challenge to the exceptional Americanism that we have seen in the last 15 years,» said Gutierrez.
He Blackrock Inc. strata, Axel Christensen, and portfolio manager Laurent Develay They pointed out that Latin America It offers positive opportunities, since the recoil of US actions reduces the performance gap with the rest of the world. «Any temporary weakness due to commercial uncertainty would represent an opportunity to buy local bonds of emerging markets,» they added.
Funds like TCW Group y T. Rowe Price They have acquired Sovereign Bonds of Colombia and South Africahighlighting its greatest liquidity and access to the market. The new Global Bonds Fund for Low Volatility of Franklin Templeton has bought debt in strong currency of Indonesia, Philippines and South Korea.
«The dismantling of American exceptionalism, including a weaker dollar, benefits emerging markets,» he said Carmen Altenirk, Aviva Analyst Investors in London And he pointed out that the additional yield required by investors to acquire debt from emerging markets in strong currency instead of American treasure bonds has remained relatively stable, compared to the same measure for many pairs of developed markets.
Most of the emerging coins They have risen against the dollar this year, with Brazil, Chile and Colombia among the ones that have risen the most. Even the Mexican weight, particularly vulnerable to the news about tariffs, is attracting buyers. The currency has risen more than 2% so far this year, and the coverage funds are more optimistic since August.
He ETF Vanguard FTSE Emerging Marketsof 83,000 million dollars and known for its VWO ticket, rose 0.5% on Thursday, expanding its monthly gain.
«As the value recovers against growth in variable income, at least selectively, the same dynamic could move to the currency market, especially when there are cheap currencies that offer high real yields, such as COP, PHP and INR,» he said Mark Cudmore, Bloomberg macroeconomic strategist.
Many factors could derail these operations, including an American economy that demonstrates resilience to a commercial war or less severe tariffs than feared. Some investors seem to bet on this result: the global shares fund Bank of America that cites data from EPFR.
Eric Souders, dieted the Cartery the Payden & RygelIt does not risk. While its background maintains positions in Vietnamese and Mongols bonds, it has also raised its cash holdings at its highest level since 2022, just in case. UU. It is recovered.
«For now, however, we believe that emerging markets look very good,» Souders said.