Emerging Markets awaken
In 2025, Emerging Markets (EM) delivered their strongest annual performance since 2017, outperforming both US and developed markets. This resilience, despite a complex global environment, reflects improving fundamentals, stronger policy discipline, and the growing role of EM within global production and supply chains.
2025: The year of resilience and comeback
A Supportive Backdrop for EM
The positive momentum observed in emerging markets in 2025 was supported by a weaker U.S. dollar, improving macroeconomic fundamentals across many emerging countries, and growing recognition of Asia’s essential role in artificial intelligence–related value chains. This broad-based outperformance among emerging markets reinforces our conviction that, far from being weakened by protectionist measures, emerging markets are gaining in autonomy and economic strength.
The foundations for further upside remain solid
While valuations are no longer at historic lows (with the EM index trading around 13.5x 2026 earnings1), EM equities continue to trade at a significant discount to developed markets (around 40% versus the US and 32% versus MSCI World2), despite superior earnings growth prospects and higher returns on equity. In our view, this valuation gap remains excessive given the convergence in risk premia between EM and DM.
Structural transformations underway
Artificial intelligence and structural trends are reshaping Emerging Markets
Beyond short-term valuation debates, EM economies are rapidly integrating artificial intelligence into industry, logistics, retail and services, driving productivity gains and lower marginal costs. This technological capability is reinforced by competitive access to renewable energy, which is becoming a strategic advantage in an increasingly fragmented global economy.
Improving financial discipline and corporate governance
After many years of capital dilution and weak shareholder returns, we are seeing tangible improvements in financial discipline, shareholder return policies and alignment of interests. This shift — already evident in South Korea, Japan and increasingly in China, could in our view open the door to a durable improvement in returns on invested capital, which we believe remains underappreciated by the market.
2026: The year of alpha, not beta
A supportive macro environment—but one that demands selectivity. Fundamentals are becoming key again
A weaker US dollar, historically high real rates and easing inflation provide EM central banks with room to gradually ease monetary policy, creating meaningful tailwinds. However, we are entering a phase of rising dispersion, where returns are likely to be driven more by earnings growth than multiple expansion, making selectivity more important than index exposure.
A favourable environment for our Carmignac Emergents strategy
This is precisely the environment in which our Carmignac Emergents strategy is well positioned. The strategy focuses on quality growth companies with strong balance sheets, good earnings visibility and genuine pricing power, while maintaining strict valuation discipline and risk management. The combination of structural growth leaders and more mature companies with more moderate growth but attractive valuations results in a balanced and differentiated profile, which has supported strong risk-adjusted performance in 2025.
We remain convinced that Emerging Markets are entering a new era, supported by earnings growth, innovation and diversification, and that a disciplined, active and conviction-driven approach is the most effective way to capture this opportunity.
1Sources: MS Research, Bloomberg, 12/01/2026.
2Sources: MS Research, Bloomberg, 12/01/2026.
Carmignac Emergents
Carmignac Emergents A EUR Acc
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 4/7
- SFDR - Fund Classification**
- Article 9
*Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. **Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. The SFDR classification of the Funds may change over time.
Main risks of the fund
Marketing Communication. Please refer to the KID/prospectus of the fund before making any final investment decisions. This document is intended for professional clients.
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Access to the Funds may be subject to restrictions regarding certain persons or countries. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA. The Management Company can cease promotion in your country anytime.
The risks, fees and ongoing charges are described in the KID. The KID must be made available to the subscriber prior to subscription. The Funds’ prospectus, KIDs, NAV and annual reports are available at www.carmignac.com, or upon request to the Management Company.
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Carmignac Portfolio Emergents refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The Fund is registered with the Spanish National Securities Market Commission under number 392. The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law. Carmignac Emergents is registered with the Spanish National Securities Market Commission under number 387.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.
Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice.
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CARMIGNAC GESTION - 24, place Vendôme - F-75001 Paris - Tél : (+33) 01 42 86 53 35 Investment management company approved by the AMF Public limited company with share capital of € 13,500,000 - RCS Paris B 349 501 676.
CARMIGNAC GESTION Luxembourg - City Link - 7, rue de la Chapelle - L-1325 Luxembourg - Tel : (+352) 46 70 60 1 Subsidiary of Carmignac Gestion - Investment fund management company approved by the CSSF - Public limited company with share capital of € 23,000,000 - RCS Luxembourg B 67 549.