The emerging market comeback

Amid China’s earlier than expected reopening and a downturn in US economic conditions, emerging markets are well positioned to continue outpacing their developed peers for growth in 2023. Discover our experts’ views on investment opportunities across EM regions and asset classes.

Key investment themes to watch for

While 2022 was a challenging year for emerging markets, amid the Fed’s aggressive response to high inflation, we are more constructive for 2023 across four main themes:

Emerging Markets Charts and Views - Springtime for Emerging Markets

Thanks to China’s economic reopening and a slowdown in developed markets, the growth disparity with emerging markets should increase in favour of EM in 2023.

Emerging Markets Charts and Views - Springtime for Emerging Markets

Despite regional differences, the peak of inflation is behind us, and we expect a more stable monetary policy. In some EM countries, rate reductions may already occur in the second part of the year.

Emerging Markets Charts and Views - Springtime for Emerging Markets

Weak fundamentals and a deteriorating outlook for the US, relative to the rest of the world, is more favourable for EM currencies in H2 2023.

Emerging Markets Charts and Views - Springtime for Emerging Markets

One of the main risks to watch out for is the excessive tightening of financial conditions affecting economic growth. Investors should also keep an eye on geopolitical developments.

Source: Amundi as of 12 April 2023. DM: developed markets. EM: emerging markets. CB: central banks.

High conviction investment ideas

Thanks to the supportive backdrop, investors should start to reconsider emerging markets’ economic and market conditions in search for new investment opportunities.


Source: Amundi Institute as of 19 April 2023. EM: emerging markets. DM: developed markets

Opportunities accross asset classes

Duration and yield, local currency


After the great repricing of 2022, yields in EM bonds are back to appealing levels from an absolute and relative standpoint. The DM-EM growth gap is expected to widen, favouring the hard-currency bond spread during 2023. Another important point to consider is the USD being weaker than expected in 2023, opening up interesting opportunities and valuations across EM FX.


Valuation metrics show EM equity markets are at historically cheap levels, and offer interesting entry points on a standalone basis and relative to DM for global investors. However, a dedicated approach is required in a fragmented EM universe. We remain particularly positive on China, Hong Kong, Vietnam and Indonesia.

MSCI US over MSCI EM spread
EM assets gaining importance in the new 60-40

The new 60-40:

Based on the recent Capital Market Assumptions study, a new approach is required to target similar returns to the historical 60-40 portfolio. EM and real assets could help boost returns to levels that traditional 60-40 portfolios will struggle to deliver, with Chinese and Indian equity markets being one of the most interesting opportunities.

Read more

Emerging Markets Charts and Views - Springtime for Emerging Markets
Emerging Markets Charts and Views - Springtime...

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