Emerging market fund managers adjusting portfolios to mitigate risks from potential US tariffs

From Morningstar: 2025-04-09 09:26:00

Portfolio managers are closely monitoring the fluid situation surrounding potential negotiations between the Trump administration and countries affected by tariffs. Options include retaliation or fiscal stimulus to support exporters. Managers are adjusting portfolios away from export-dependent sectors towards those reliant on domestic demand to mitigate risks.

Top-rated fund managers are reacting to emerging market turmoil by anticipating economic growth slowdowns due to tariffs. GQG Partners Emerging Markets Equity fund is reducing exposure to high-growth stocks and focusing on companies with defensive growth profiles. Polar Capital Emerging Markets Stars maintains an underweight position in China and sees growth opportunities in specific sectors. JPM Emerging Markets team expects inflation in the US and focuses on companies with durable competitive advantages.

Fidelity Emerging Markets Equity fund is concentrating China exposure in consumer-facing sectors and adopting modest exposure to exporters. The fund is overweight in Latin America, focusing on domestic businesses and consumer companies in Mexico and domestic banks in Brazil—sectors insulated from tariff impacts. Portfolio managers are making strategic adjustments to navigate potential impacts of tariffs on emerging markets.



Read more at Morningstar: How Emerging Markets Fund Managers Are Reacting to…