Why investors are bullish on emerging markets: BlackRock's Chaudhuri

BlackRock (BLK) chief investment and portfolio strategist of the Americas, Gargi Chaudhuri, joins Market Domination Overtime host Josh Lipton to explain why investors are so bullish on emerging markets this year.

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Video Transcript

00:00 Speaker A

You say here most respondents in your latest client survey bullish. Um, in terms of what they like, they called out US stocks. They also called out emerging markets. Why why now for emerging markets, Gargi? I'm just curious. What what would you see is sort of opportunity and risk there?

00:23 Gargi

Yeah, absolutely. So obviously emerging markets had a great 2025 and one of the things that we actually noticed in our client portfolios, especially for those that are based in the United States, um, advisors whose portfolios we tend to look at, have that underweight to emerging markets and much of the allocation is actually to uh US markets which has worked every other year than 2025 and 2026 so far. Why now? It certainly started last year. Uh, the theme for emerging markets is that when DM does well, EM gets a huge amount of tailwind as a result of that. Obviously DM growth, US growth continued to uh be very strong, higher than potential, policy easing, that's another big story for EM out performance and most importantly, the US dollar remaining stable. It doesn't have to drop like it did last year, but just remaining stable is very, very good for the EM equity story. And I touched upon this earlier, but focusing on the AI diversification theme as an EM play also is something that clients are focusing on. So very much a covering of an underweight story, huge amount of inflows in the EM trade already in 2026. So we're seeing that in tickers like IEMG, we're seeing that in tickers like EWW, which are, uh, you know, finally gathering some flows after not so much last year despite the very good performance.

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