Emerging markets—leading not emerging

Emerging markets are moving beyond their traditional role as low-cost manufacturers and are becoming important centers of innovation, especially in semiconductors, electric vehicles, robotics, and renewable energy. Taiwan and South Korea stand to benefit from heavy AI-related spending, while Latin America remains strategically important through its copper and lithium resources that support electrification. At the same time, governance reforms in markets such as Korea and China may help reduce valuation discounts by improving shareholder returns and capital efficiency.

These trends create a compelling opportunity for investors who can look past short-term volatility. However, risks remain from tariffs, higher interest rates, and any slowdown in the semiconductor cycle. Overall, emerging markets now appear less like a broad growth story and more like a selective source of structural value.