Emerging Markets: Cautiously Optimistic
Portafolio Journalist 03.18.2026 22:59 Updated: 03.18.2026 22:59
TL;DR
- Emerging markets (EM) demonstrate resilience in early 2026, following an exceptional 2025, despite a more uncertain global context.
- The MSCI EM index has gained nearly 15% by late February, with Asia and Latin America as key drivers.
- Geopolitical tensions have reintroduced global risk, impacting markets through energy prices, inflation expectations, and financial conditions.
- Structurally, many EMs are better positioned with contained inflation, credible monetary policies, and stronger external balances compared to developed economies.
- Megatrends like AI are boosting Asia (South Korea, Taiwan), while the energy transition and supply chain shifts support Latin America and Southeast Asia.
- Nearshoring benefits Mexico, Brazil, and Vietnam, with India leveraging favorable demographics.
- Latin America plays a strategic role as a supplier of critical minerals like copper and lithium, benefiting from electrification and AI trends.
- Selective investment is advised: focus on hard currency emerging debt in countries with strong fiscal frameworks, and equities exposed to energy, metals, automation, and AI.
- Geopolitical shocks highlight volatility, but emerging markets, especially in Latin America, offer attractive opportunities by distinguishing tactical noise from structural trends.