Company Interview / Emerging opportunities in emerging markets

Key points:

Emerging markets seen at a cyclical inflection point with improving currencies, earnings and valuationsTech and AI dominate the benchmark, increasing index concentration and the case for active strategiesKey opportunities flagged in Korea, Taiwan and the UAE, with a strong focus on semiconductor demand dynamics

Varun Laijawalla from Ninety One sets out a bullish case for emerging markets, arguing the asset class is at an inflection point for the second half of 2026. Laijawalla points to three historic headwinds – a strong US dollar, weak earnings and unfavourable valuations – and states all are now turning more supportive for emerging markets. He highlights that year‑to‑date flows into emerging market equities are the strongest in seven to eight years, suggesting global asset owners are starting to reallocate capital away from the US.

Technology remains central, with Laijawalla noting that around 40% of the emerging markets index is now tech, including major names such as TSMC, Samsung Electronics and Tencent. He argues this concentration makes passive investing more dangerous, as three companies dominate 30% of the benchmark and three countries about 70%, creating a stronger case for active management. For semiconductor players, he watches inventory levels closely as the key signal for the AI cycle.

Regionally, Laijawalla is positive on Asia, especially Korea and Taiwan, given their AI exposure, and also highlights the United Arab Emirates as an under‑appreciated story due to pro‑growth, less protectionist policies and structural reforms such as long‑term visas.