Global Asset Managers Shift Focus to Emerging Markets
According to Citi's analysis of recent fund reports, top global asset managers are increasing their exposure to emerging market equities, local currency bonds, and credit products. These moves reflect confidence in strong global growth and a weaker dollar providing a solid foundation for emerging economies.
Emerging Markets Show Resilience
Despite market volatility sparked by concerns over AI's economic impact, emerging market assets have remained resilient. The MSCI Emerging Markets Index rose as much as 0.7% on Thursday, hitting a new all-time high. Trading volumes for related ETFs have also surged significantly.
Challenges in Developed Markets
As capital flows into emerging markets, developed markets face increasing headwinds. Policy uncertainty and fiscal concerns are weighing on investor sentiment, driving sharp increases in bond yields in the U.S., Japan, and Germany, signaling growing caution among market participants.