The EM power play: does EM even need DM?

The macro

• Tariffs are reshaping global demand – but not derailing EM growth: Short-term shocks are real, but emerging economies are adapting fast, finding new markets and building resilience.
• Domestic demand is redrawing the EM map: India and China are increasingly driven by internal consumption, while smaller economies like Chile remain export-led – challenging how we classify emerging markets.

The market

• The EM race is still on – but the leaders are changing: Mexico and Brazil are gaining ground, while China and India face headwinds from trade tensions and policy missteps.
• Smaller EMs step into the spotlight: Countries like Vietnam and Malaysia are benefiting from shifting supply chains – offering fresh angles for investors tracking the next wave of growth.

The managers

• Currency and rate dynamics favour local debt: With EM currencies undervalued and real rates high, local debt markets offer attractive entry points – especially in frontier economies.
• Equity focus is shifting towards reform-led markets: China and India face valuation and policy challenges, while Brazil and Korea stand out for corporate strength and reform momentum.