“Asia and emerging markets’ rally reflects a move beyond US mega-caps, as investors broaden the tech theme and diversify across regions and sectors to avoid concentration risk. Overall, we believe diversification and flexibility will be structurally important going forward.”
- Most equity indexes in Asia rose more YTD than both the US and Europe, except for China. Within EM, Latin America also saw strong gains.
- Looking to Asia, the rally suggests that investors are moving outside of US mega caps to AI supply-chain enablers.
- With persistent uncertainty, diversification* across countries and sectors, with a focus on quality and balance-sheet discipline, has become paramount.
Since the start of the year, Asian indexes are leading equity markets, with the MSCI Asia Pacific registering its best performance relative to the S&P 500 since 2000. This outperformance is linked to robust demand for semiconductors and AI-related components, confirming a rotation of investors’ interest from companies with a high level of AI investment to companies that control scarcity inside and outside of the IT sector: critical chips and memory, power equipment, grid infrastructure, thermal management.
You can now read the full whitepaper at the link below
