EEM Overview

Emerging Markets Outlook: Wall Street strategists predict that emerging markets will continue to outperform in the current year following a strong performance last year.

Confidence Amid Global Changes: The bullish sentiment from strategists persists despite ongoing disruptions in the global order, suggesting a resilient outlook for these markets.

Emerging Markets Performance: Emerging markets have significantly outperformed U.S. stocks over the past year, with the iShares MSCI Emerging Markets ETF returning over 39% compared to the SPDR S&P 500 ETF Trust's 17%.

Positive Outlook: Ted Neild, CEO of Gresham Partners, believes the favorable conditions for emerging markets relative to developed markets are more promising than in the past decade, attributing this to factors like declining U.S. dollar strength and strong overseas earnings momentum.

Current Situation: The U.S. seizure of Venezuelan leader Nicolás Maduro has led to significant turmoil across Latin America.

Investor Sentiment: The ongoing instability in the region may deter potential investors from engaging in Latin American markets.

Emerging-Market Stocks Performance: Emerging-market stocks have significantly outperformed U.S. equities in 2025, marking a notable shift in market dynamics.

Long-Term Trends: This outperformance follows years of underperformance by emerging markets compared to the U.S., suggesting a potential reversal in trends.

Cash Levels Decline: Bank of America's global fund manager survey indicates cash levels have dropped to an all-time low of 3.3%, down from 3.7% in November.

Investor Optimism: The low cash levels reflect a high level of optimism among fund managers, suggesting that investors are heavily invested in risk assets.

Market Implications: According to report author Michael Hartnett, this bullish positioning could pose significant challenges for risk assets moving forward.

Overall Sentiment: The findings highlight a prevailing sentiment of confidence among investors, with many already fully committed to the market.