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Episode Description
2025 was a record-breaking year for Emerging Markets, seeing the largest capital inflows in over a decade. But is this a short-term flight from the US dollar, or the beginning of a structural "EM Supercycle"?
In this episode, we sit down with Malcolm Dorson (Senior PM & Head of EM Strategy) and Billy Leung (Equity Research Analyst) from Global X to dissect the two engines of global growth: India and China. We explore why the "uninvestable" tag is fading from China, how India is carving a unique path through its landmark 2026 Free Trade Agreement with Europe, and why a 1% drop in the US dollar could be the most important signal for your portfolio.
In this episode we cover:
The Great EM Rotation
The "February Surge": Breaking down why we just saw the largest inflows into EM in 11 years. Is it "choice" or a "flight from the US"?
Early Innings: Exploring Global X’s thesis on whether we are at the start of a multi-year Emerging Market cycle.
The 3.1% Rule: The Dollar & EM
The Inverse Relationship: Understanding the mechanics of why EM equities historically rise 3.1% for every 1% drop in the US dollar.
Currency Risk: How to manage FX volatility when investing in volatile regions.
China: From "Uninvestable" to Rebirth
The Sentiment Shift: Looking back at the regulatory hurdles of previous years and what has changed to bring institutional capital back to Beijing.
AI & Tech: How China’s push for "tech self-reliance" and the rise of local LLMs (like the DeepSeek breakthrough in early 2026) are changing the narrative.
India: The World’s New Growth Engine
The India-EU FTA: The implications of the "Mother of All Deals" signed in January 2026 and how it positions India as the premier "China Plus One" beneficiary.
Demographics vs. Policy: Is India simply where China was 20 years ago, or is the "market-friendly" democratic framework a fundamentally different catalyst?
The AI Arms Race
- Tailwinds vs. Headwinds: Does India’s services-heavy economy have a natural advantage in AI implementation, or does China’s manufacturing scale give it the edge in hardware?
Portfolio Construction & Strategy
- Active vs. Passive: Why broad index tracking might be dangerous in EMs and where to apply "quality" filters.
- The $100k Challenge: A hypothetical breakdown of how to allocate $100,000 across the EM landscape today.
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