As wealth managers increase their exposure to emerging markets, which appear to benefit from the rising uncertainty of US President Donald Trump’s policies, this news service visited a number of wealth managers in Paris last week to discuss their stance on emerging markets.  

Kevin Thozet at Paris-based asset manager Carmignac said that emerging market equities are undervalued compared with the US and Europe, and have a strong potential to grow.

“We are overweight in both emerging markets and Europe, and prefer emerging markets to Europe, which are underpenetrated. We are underweight in the US, although we still have heavy exposure there,” Thozet told this news service in an interview in Paris. “Overall, we are overweight in equities and underweight in bonds.”

With growth in emerging market economies outpacing developed markets and the dollar weakening, Thozet expects the outperformance of emerging markets to continue, and potentially in Europe.

In particular, Thozet likes Taiwan and South Korea, and invests in Taiwan Semiconductor Manufacturing Co (TSMC) and South Korea’s SK Hynix. “We also have some exposure to India, but it remains an expensive market,” he added.

In July, emerging markets posted strong gains, driven by China, Taiwan, and South Korea. The International Monetary Fund (IMF) revised its 2025 growth forecast for emerging economies upward to 4.1 per cent from 3.7 per cent, supported by improved economic conditions in China and a partial easing of tariffs between the US and China. In China, Carmignac is identifying opportunities in themes such as artificial intelligence, wellbeing and healthcare. A 15 per cent tariff with the US and Korea was also agreed.

Thozet highlighted that the FP Carmignac Emerging Markets Fund invests in China, Taiwan and South Korea, Mexico and Brazil, with the top holding being Taiwan Semiconductor Manufacturing Co (TSMC). Other top 10 holdings include South Korea’s Hyundi Motor and memory chip supplier SK Hynix. They also include Brazil’s electric utilities firm Centrais Eletricas Brazileiras, Mexico’s banking and financial services firm Grupo Financiero Banorte  and China’s e-commerce holding VIPShop Holdings.

Carmignac also increased its investment in DIDI, the Chinese mobility platform, and initiated a new position in CATL, a specialist in electric vehicle batteries, with exposure also to energy storage and autonomous vehicles.

Agreement
Thozet is not alone in his views. Philippe D’Orgeval, deputy group chief investment officer at Paris-based Amundi, which has €2.2 trillion ($2.5 trillion) in assets under management, told this news service that they are slightly overweight in equities towards Europe and emerging markets, at the expense of the US. “We see a big gap between US and Europe valuations, with Europe valuations being more attractive. We are also interested in emerging markets due to the growth opportunities there.”

Despite the 50 per cent increase in tariffs on Indian exports to the US, due to its continued purchases of Russian oil and high import barriers, D’Orgeval remains slightly overweight in India. He said the country still has one of the highest rates of growth.

The US is the largest export market for India at $87.4 billion in 2024, but it accounts for only about 2 per cent of India’s GDP. D’Orgeval expects India to balance out the tariff impact with stimulus measures and a focus on domestic manufacturing and consumption. Some sectors have also been exempt from US tariffs, including pharmaceuticals, energy products, certain electronics and semiconductors. D’Orgeval is more neutral on China and South Korea.

Delphine Di Pizio-Tiger, global head of asset management at Paris-based wealth manager Indosuez, also told this news service that she has increased her exposure to emerging markets recently, being overweight in China, and has reduced it slightly in Europe. She highlighted the digitalisation and decarbonisation drivers in China. While it still relies on fossil fuels, it produces more than 80 per cent of all solar photovoltaic panels, half of the world’s leading electric vehicles and a third of its wind power. However, Di Pizio-Tiger has retained her exposure to the US, with an overweight position in tech as she remains convinced of the AI theme.  

Europe
Despite the difficult political situation in France, Thozet sees some opportunities in French assets. He favours sectors that are not exposed to the economy, such as the aerospace industry and luxury goods. Top holdings include France’s Airbus and luxury goods company Hermès – a firm also favoured by Paris-based Edmond de Rothschild Asset Management who likes its sustainable stance. Against this background, French Prime Minister Francois Bayrou lost a confidence vote on Monday, plunging the eurozone's second largest economy into crisis.  

The FP Carmignac European Leaders Fund invests in Germany, France, Spain, Ireland, amongst others, with top holdings including France’s L’Oreal and Hermès. Other holdings include Dutch photolithography machine manufacturer ASML, Danish healthcare firm Novo Nordisk and Germany’s Siemens. See more about emerging markets here.