--- title: "As the value of dollar assets diminishes, global asset management turns to emerging markets, with capital inflows potentially igniting a new round of bullish trends" type: "News" locale: "en" url: "https://longbridge.com/en/news/277115311.md" description: "Global asset management companies are becoming more optimistic about emerging markets, which may bring new upward momentum to the market. According to analysis from Citigroup, these companies have increased their investment positions in Asia, Latin America, and Europe, the Middle East, and Africa. The MSCI Emerging Markets Stock Index is close to its historical high, with a year-to-date increase of nearly 15%. Despite fluctuations in the U.S. stock market, Asian tech stocks have performed strongly, and the market capitalization of South Korea has surpassed that of France, becoming the ninth largest market in the world. Analysts point out that investors are seeking diversification opportunities in non-U.S. dollar assets" datetime: "2026-02-26T23:42:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/277115311.md) - [en](https://longbridge.com/en/news/277115311.md) - [zh-HK](https://longbridge.com/zh-HK/news/277115311.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/277115311.md) | [繁體中文](https://longbridge.com/zh-HK/news/277115311.md) # As the value of dollar assets diminishes, global asset management turns to emerging markets, with capital inflows potentially igniting a new round of bullish trends According to analysis by Citigroup, global asset management companies managing over $20 trillion in assets are increasingly optimistic about emerging market stocks, currencies, local currency bonds, and credit, which may inject new momentum into the record rally of this market. After studying the outlooks released by some of the largest asset management companies globally, Citigroup found that these funds have increased their long positions in markets across Asia, Latin America, and Europe, the Middle East, and Africa. This finding comes as the MSCI Emerging Markets Stock Index trades near historical highs—rising 0.2% on Thursday, with a year-to-date increase of nearly 15%. This week, a report on how artificial intelligence will disrupt multiple sectors of the economy raised concerns and led to volatility in U.S. stocks, but Asian tech stocks remained unaffected. This is because companies in South Korea and Taiwan produce hardware used to build AI networks. The South Korean benchmark index rose another 3.8% on Thursday, with Samsung Electronics up 9%, marking the longest consecutive rise since 1986. The market capitalization of the South Korean stock market recently surpassed that of France, becoming the ninth largest market globally, driving the emerging market stock index up 6% just this month. Meanwhile, the S&P 500 index is expected to close flat in February. U.S. stocks fell on Thursday, and Nvidia's (NVDA.US) solid earnings guidance failed to comfort investors seeking confidence in the AI outlook. ![11.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260227/1772148714360995.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) The overall bullish sentiment towards emerging markets stems from rising uncertainty in U.S. policies and an expanding fiscal deficit, which puts pressure on the dollar. While this has forced more investors to seek diversification away from dollar assets, concerns about increased spending in Japan, Germany, and other developed countries are also rising. Citigroup analysts told clients that emerging markets are receiving more attention "because asset managers are looking for diversification opportunities in non-U.S. assets, and they see opportunities in emerging markets due to improving fundamentals and a weakening dollar." **Cautious Trading** Despite little change in the dollar, most emerging market currencies weakened on Thursday. Some Asian currencies rose, with the New Taiwan Dollar increasing by 0.3% due to strong foreign capital inflows, while the Chinese Yuan and Indonesian Rupiah also strengthened. However, against the backdrop of falling commodity prices, overall sentiment in emerging market forex became cautious during the session, with most Latin American currencies declining against the dollar. The Colombian Peso saw a particularly significant drop, falling nearly 4%, marking the largest single-day decline since March 2020. A recent poll showed leftist senator Iván Cepeda leading significantly in the presidential race. Neighboring Ecuador has also raised tariffs on Colombian imports, escalating trade disputes and exacerbating negative sentiment towards Colombian assets. The Peso was the worst-performing emerging market currency on Thursday. Colombian dollar bonds fell across the board, becoming one of the weakest performers in emerging market debt assets Long-term dollar-denominated bond prices have fallen by more than 1 cent. Alvaro Vivanco, an emerging markets macro strategist at Wells Fargo, stated, "The election on March 8 is just around the corner, and local yields are soaring." He added that while the trends reflected in the polls are not new, the approval rating of current President Gustavo Petro has recently "significantly increased," providing a "higher ceiling" for Cepeda in the voting. Other Latin American currencies are also under pressure. The Chilean peso fell nearly 1%, the Argentine peso dropped 0.6%, giving back the four-month high reached earlier this week. The Brazilian real declined by about 0.3%. In Brazil, Flavio Bolsonaro's presidential campaign momentum is strengthening, surprising skeptics who initially viewed his candidacy as a strategy to seek a pardon for his father, imprisoned former President Jair Bolsonaro, rather than a serious campaign. Many centrists were concerned that his candidacy would split the right-wing vote, handing the October election to incumbent President Luiz Inacio Lula da Silva. However, his recent rise in the polls is challenging this view. In other markets in the region, Latin American stock markets lagged, with a regional stock index down 0.7%, diverging from the slightly rising MSCI Emerging Markets Index. Nevertheless, Latin American stock markets remain one of the best-performing markets globally this year, up nearly 20% year-to-date, outperforming the overall emerging markets' approximately 15% increase. However, there are notable exceptions. The Argentine stock market failed to follow the overall rise in Latin America, as enthusiasm surrounding President Javier Milei's electoral victory gradually waned, and concerns over weak corporate earnings intensified. 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