Convictions
India and EM winners of the rerouting shift
Discover new opportunities in emerging markets
Key investment implications:
In a nutshell
- Emerging markets look attractive as economies recover, inflation cools, and central banks cut rates. Waning US exceptionalism further boosts EM appeal.
- Turkey and South Africa offer strong opportunities in retail and automotive, driven by rising domestic consumption.
- Undervalued Asian markets such as South Korea, Indonesia and the Philippines present opportunities, with the latter two benefiting from young populations and growing middle classes.
- In Latin America, stable commodity prices limit support for exporters. We favour local businesses that face less foreign competition.
- In China’s challenging environment, marked by deflationary pressures and ongoing US tensions, we focus on domestically oriented companies in defensive sectors, including healthcare, renewable energy and consumer services.
- India’s initiative “Make in India” is attracting multinationals, particularly in defence, IT, services and consumer goods. Growth in these sectors is being driven by stronger consumer spending, expanded government investment, and improved credit availability.
- Indian large-caps still offer better value than other emerging markets.
- Consumer spending is rising, supported by government wage boosts and falling inflation, while businesses are ramping up investment plans.
- India’s internal tax reform should be positive for domestic consumption, even as secondary tariffs remain high. From a long term view, the country should be able to take advantage of shifting global supply chains.
- Supply chain restructuring continues to favour India and other EMs, which offer both manufacturing capabilities and expanding domestic demand.
- EM bonds should gain from a weaker US dollar, though political tensions and trade disputes could push inflation higher.
- Hard currency bonds are likely to benefit from the growth gap between EMs and DMs, while default rates should remain limited.
- We favour countries with disciplined government spending, stable politics and improving credit profiles.
- Brazil, Mexico, Colombia, South Africa and Turkey offer some of the most appealing returns after accounting for inflation.
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Amundi Funds Emerging Markets Bond
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Amundi Funds SBI FM India Equity
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Amundi Core MSCI Emerging Markets Swap UCITS ETF
Amundi MSCI India II UCITS ETF
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Diversification does not guarantee a profit or protect against a loss.
Source: Amundi Investment Institute, Mid-Year Outlook - Ride the policy noise and shifts, June 2025.
Marketing material for professional investors only
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 21 August 2025. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 21 August 2025
Doc ID: 4744936