Report published August 26, 2026
UBS Monthly Update: Investing in Emerging Markets – Broadening Momentum
Source and citation context
- Issuer
- UBS
- Report date
- August 26, 2026
- Analysis as of
- August 25, 2026
Authors / editors: Maximilian Kunkel (Editor-in-Chief), Themis Themistocleous (Author), Alejo Czerwonko (Editor-in-Chief), Tilmann Kolb (Author), Xingchen Yu (Author), Laura Smith (Author), Alberto Rojas (Author), Pietro Santin (Author), Laura Assis Iragorri (Author)
Finvaulta summarizes UBS's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
UBS maintains an Attractive stance on global and emerging market equities, upgraded Taiwan to Attractive, and highlights the resilient carry of EM sovereign USD debt and high-yielding currencies. Commodity allocations are recommended to buffer ongoing Middle East hydrocarbon disruptions and potential inflation shocks.
Key Takeaways
- 1.EM equity earnings momentum is broadening beyond narrow AI beneficiaries across industrials, financials, and cyclical sectors; Taiwan equities are upgraded to Attractive.
- 2.EM sovereign USD bonds yield ~6.5% with investment-grade average quality (BBB-), delivering an asymmetric risk profile that generates positive returns in 90% of scenario probability weightings.
- 3.High-yielding EM currencies (BRL, MXN, ZAR, INR) offer attractive carry supported by resilient global growth and softer USD dynamics, though near-term positioning warrants discipline.
Table of Contents
- Editorial
- Global investment views
- Middle East conflict
- Brazil
- Equities
- USD bonds
- Currencies
- Emerging market asset snapshot
- Emerging markets publications
Report data
Scenario analysis: Composition of returns — as of August 25, 2026.
| Metric | Estimate | Context |
|---|---|---|
| MSCI EM Aggregate Earnings Growth (Q2 tracking) | 57% | Earnings growth for reporting MSCI EM companies tracking 57% y/y with 43% beating expectations. |
| MSCI EM Price Target | 1920 index points | UBS price target for the MSCI Emerging Markets Index by June 2027. |
| EM Sovereign USD Bond Yield | 6.5% | Average yield of emerging market sovereign USD debt (4.3% Treasury yield + 220bp spread). |
| Brazil Gross Debt to GDP | 81% | Brazil gross public debt has risen above 81% of GDP approaching pandemic levels. |
| Brazil Nominal Fiscal Deficit | 10% | Brazil nominal fiscal deficit remains close to 10% of GDP. |
Reports in this series
Investing in Emerging Markets is shown in chronological order through this edition, published on August 26, 2026.
Part of the Investing in Emerging Markets series — view all 4 editions
Looking for the latest edition? Investing in emerging markets en 1665994 (Sep 8, 2026)
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Authors / Editors
Reported Data Context
- MSCI EM Aggregate Earnings Growth (Q2 tracking): 57 % (Q2 2026 y/y) · Source: UBS
- MSCI EM Price Target: 1920 index points (June 2027) · Source: UBS
- EM Sovereign USD Bond Yield: 6.5 % (August 2026) · Source: J.P. Morgan EMBI Global
- Brazil Gross Debt to GDP: 81 % (August 2026) · Source: Bloomberg, UBS
- Brazil Nominal Fiscal Deficit: 10 % (August 2026) · Source: UBS