Investment Officer France

Emerging markets started the year strongly, but geopolitical tensions stemming from the US/Israel–Iran conflict have since tempered sentiment.

The way capital flows is changing. Alongside banks and traditional networks, digital platforms are increasingly claiming a prominent place in this chain. This shift is altering access points to markets and strengthening the role of standardized products in portfolio construction, such as ETFs.

Investors seeking to diversify their portfolios and reduce dependence on traditional equity indices are increasingly turning to private markets. However, through their public holdings they already have exposure to those same markets. The additional costs associated with private funds do not structurally deliver higher returns.

Equities are off to a volatile start in 2026. While initial optimism around the AI capex boom continued to support global equity markets, a rotation into cyclical sectors, value, and non-US stocks helped broaden the rally.

The unrest in the Middle East has affected Emerging Market Debt (EMD) through rising rates and higher risk premiums. There is no indication, for now, of a structural deterioration in credit risk.

The fact that some bond issuances are now oversubscribed by as much as ten times illustrates how sharply market sentiment has shifted. After more than a decade of interest rates close to zero, bonds in the eurozone are once again offering returns, around 3 to 4 percent for investment grade.

The war against Iran has now lasted a month, and the consequences are becoming visible at a rapid pace. The conflict began as an American-Israeli operation targeting Iran’s nuclear program and the regime in Tehran. But while the United States and Israel are dropping bombs, Europe is absorbing the heaviest economic blows. The result of decades of failed European energy policy, strategic dependency, and a lack of geopolitical power.

If there is one thing that characterizes the investment world, it is that it is full of clichés, parrots, and an enormous reluctance to change. It is sometimes laughable how market experts produce the same one-liners for twenty years or bury you under their “market wisdom.”

Blackrock is an established behemoth with total assets that easily overwhelm its closest rivals, while UBS Asset Management is rebuilding following the acquisition of Credit Suisse Asset Management.