While in the longer term the French firm is positive about the outlook for emerging markets, it has decided to reduce some exposure in light of recent geopolitical turmoil.

In light of geopolitical uncertainties and energy prices rising, Indosuez Wealth Management has reduced its exposure to emerging market equities. 

The France-headquartered group (€233 billion ($270.6 billion) in AuM at the end of 2025) thinks that, on balance, higher energy costs amidst the war  in the Middle East are a negative for most, if not all, countries in the “emerging” category. 

The firm retains a relative preference for US stocks, citing robust earnings momentum in the world’s largest economy. Another positive force is sustained share buyback flows and M&A activity, which help to bolster share prices, Adrien Roure, multi-asset portfolio manager at the firm, said in a recent update on the firm’s asset allocations. 

Commenting on emerging markets, Roure said that after a marked period of outperformance, “we have reduced our overweight to take into account less favourable short-term factors, such as rising oil prices and the recent appreciation of the dollar. Our strategic view remains positive, underpinned by solid fundamentals, favourable earnings momentum and proactive economic policies.”

“Selected regions and themes continue to offer compelling opportunities, notably the technology sector in Asia and the Latin American markets, the latter benefiting from increased demand for commodities. Furthermore, we maintain a preference for emerging Asia over Japan, as Japan remains more vulnerable to risks associated with monetary policy tightening and potential yen appreciation,” he said. 

During a recent meeting with WealthBriefing in London, Alexandre Drabowicz, CIO at Indosuez Wealth Management, said the firm had entered 2026 with a “fairly positive” view of equities, albeit taking a more diversified view; it was neutral on Europe and negative to Japan. Today, the firm is more cautious about the European outlook, he said. It also remains cautious about the outlook for the dollar.

Despite the slight tactical reduction in emerging market equities exposure, Drabowicz said he remains a “big believer in emerging markets as an asset class,” arguing that while emerging markets account for 40 per cent of global GDP, they make up 60 per cent of the world’s population, but only 10 per cent of global equity benchmarks.

Lombard Odier, M&G Investments, Edmond de Rothschild, among others, have been stepping up emerging market exposure recently. Sonal Desai, chief investment officer of FranklinTempleton fixed income, has said, however, that the resilience of emerging markets will be tested as a result of the Iran conflict. See coverage here, here and here.

Europe
In his note, Roure said that Indonesia’s allocation to the euro area remains “more balanced.”

“The recent performance of equity markets there has mainly been based on an expansion of valuation multiples, rather than on upward earnings revisions. Although fiscal support measures are set to benefit domestic segments, particularly small caps, we have decided to place this segment under increased scrutiny in a scenario of persistent energy tensions and inflationary pressures on rates,” he said. 

“In bond markets, we maintain low interest-rate sensitivity and retain an underweight position in sovereign debt. Uncertainties surrounding fiscal trajectories, combined with an increasing risk of a prolonged energy shock, are likely to weigh on longer maturities,” Roure said.

“In credit, the asymmetric risk/return profile appears less favourable, in a context of gradually widening [yield] spreads from historically tight levels, with geopolitical uncertainties and observed fragilities in private credit beginning to affect the asset class. We are reducing our overweight, although we still maintain a constructive view on the asset class, as corporate balance sheets remain broadly robust,” Roure added.