BlackRock Cuts Emerging Markets to Neutral, Lifts Euro Zone Bonds to Overweight
Updated
Updated · WTVB · Jun 30
BlackRock Cuts Emerging Markets to Neutral, Lifts Euro Zone Bonds to Overweight
3 articles · Updated · WTVB · Jun 30
Summary
BlackRock Investment Institute shifted emerging-market equities and hard-currency debt to neutral from small overweight in its mid-year outlook, while raising euro zone government bonds to overweight.
The firm said emerging-market hard-currency assets now offer a less attractive risk-reward profile, even as fundamentals improve, and it flagged concentration risks around the AI trade in stocks.
BII instead upgraded emerging-market local-currency debt to small overweight, citing yield relative to volatility and stronger fundamentals.
For euro zone sovereign debt, BlackRock favors short- and medium-term bonds, arguing markets overstate how long policy rates will stay near 3%.
The changes leave BlackRock still seeing selective AI-linked infrastructure opportunities in Latin America, but broadly less bullish on emerging markets than earlier this year.