BlackRock shifts focus to Latin American bonds, cuts emerging‑market equity stance

BlackRock revised its emerging‑market strategy for the second half of 2026, naming Latin America as the preferred region within its emerging‑market portfolio. The firm kept an overweight recommendation on local‑currency debt, highlighting Brazil, Colombia and Mexico as offering “a very attractive combination of return and risk.” It noted that these markets show lower correlation with global AI‑driven equities and with Middle‑East geopolitical tensions, providing valuable diversification.

At the same time, BlackRock moved its equity outlook for emerging markets from overweight to neutral, citing recent strong performance and the risk of concentration in AI‑linked stocks, especially in Taiwan and South Korea. The strategy emphasizes sector‑specific, granular approaches, with Brazil’s critical minerals and energy transition role underscored as a structural growth driver. Overall, the firm seeks to balance higher‑yield fixed‑income opportunities with reduced exposure to AI‑related volatility.

Key remarks from BlackRock’s Latin America chief strategist Axel Christensen include: “Local‑currency bonds offer a combination very attractive of return and risk,” and “Latin America stands out clearly because of its idiosyncratic elements.”