News / Taiwan / economic_daily
BlackRock Upgrades Emerging Markets to Overweight, Citing 50% Valuation Discount to U.S. Stocks
Finance · Investment Managers · economic_daily · 2026-09-21
BlackRock has upgraded emerging market equities to overweight, highlighting their 50% valuation discount compared to U.S. stocks and their critical role in the AI supply chain.
What Happened
Strategic Reallocation: Despite the Federal Reserve's interest rate hikes, BlackRock remains bullish on risk assets and has upgraded emerging market stocks to an overweight position. The firm argues that if rising yields are driven by robust economic growth, corporate earnings will be sufficient to offset higher financing costs.
Attractive Valuations: Analysts at BlackRock note that the MSCI Emerging Markets Index is projected to see earnings growth exceeding 34% over the next year, significantly outpacing the 20% growth expected for U.S. markets. With emerging market P/E ratios hovering around 10x compared to nearly 20x for U.S. stocks, the 50% discount offers a compelling entry point.
AI Supply Chain Integration: The firm identifies emerging markets as a vital component of the AI ecosystem, with Taiwan and South Korea anchoring the semiconductor and hardware supply chains. Additionally, regions like Latin America are providing essential raw materials and infrastructure, making them key beneficiaries of the global AI expansion.
Dynamic Investment Approach: BlackRock advises investors to maintain flexibility as AI models evolve and commoditize, which may shift profit opportunities across different sectors. The firm emphasizes a selective approach to portfolio construction rather than assuming current market leaders will maintain their dominance indefinitely.