The Macro Strategist's Case For Owning Emerging Markets
Complete. Here is the key summaryThe article argues for owning emerging markets (EM) based on fundamental macro metrics like long-term performance, valuations, flows, and earnings revisions. It highlights that while EM has been flat for 17 years, the landscape is shifting due to the AI transformation. Key tech giants such as TSMC, Samsung, Tencent, and Alibaba now constitute over one-third of the index, driving EM fortunes in sync with the global AI cycle.
Back to boring basics
There is no shortage of grand narratives around emerging markets. This isn't one of them. Below are the straightforward charts many macro strategists look at when evaluating EM: long-term performance, valuations, flows, positioning, earnings revisions and monetary policy. One important caveat: these charts largely ignore the AI transformation now taking place inside the benchmark, where TSMC, Samsung Electronics, SK Hynix, Tencent and Alibaba account for more than one-third of the index and increasingly drive EM's fortunes alongside the global AI cycle.