The outperformance was driven by artificial intelligence (AI)-led demand dominated by North Asia, and China’s cost-effective innovation, supported by a softer US dollar and lower rates. In 2026, emerging markets and Asia Pacific equities continue to offer robust opportunities, for both hedging and growth, with valuations remaining attractive on a price-to-earnings basis compared to western markets. This momentum is reinforced by North Asia’s central role in the global AI build-out, accelerating earnings growth for the asset class, rising capital returns, and a unique opportunity of innovation and income in China – while offering true diversification beyond China too.

Download the paper to explore five reasons why investors should consider incorporating EM and Asia Pacific equities into portfolios today, along with the potential risks to be considered.

1. Riding the tailwinds of a weaker dollar and an inflationary boom
2. Emerging markets and the Asia Pacific region are the engine of the AI build-out
3. Earnings-led upside with attractive valuations and improving capital return
4. China’s twin opportunity: Innovation and income in a deflationary environment
5. Diversification: Emerging markets and Asia are more than just China