Emerging markets came into focus over the course of 2025 amid a volatile global backdrop. Heightened geopolitical tensions and uncertainty over US trade policy caused periodic bouts of weakness, as investors assessed the potential impact of tariffs on global trade and growth.
However, these concerns also contributed to a weakening of the US dollar, a dynamic that has tended to be supportive for emerging markets by easing financial pressures and allowing for more flexible policy. This trend was reinforced as some investors began to reassess the risks of over-concentration in US assets and diversified more actively into other markets.
In this environment, opportunities across emerging markets have remained uneven and recovery has played out differently by country and sector, with stronger momentum in parts of Europe, in technology-linked markets in Asia, and a more cautious – but improving – outlook in China. Against this backdrop, active stock selection is critical. The following three stocks reflect our approach to investment.
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Focus on technology to profit from emerging markets
National Bank of Greece (Athens: NBG) reflects the ongoing repair of parts of Europe’s financial system. Greece has emerged as one of the clearer recovery stories, supported by improving macroeconomic fundamentals, resilient private consumption and a sustained reduction in public debt, culminating in a return to investment-grade status.
NBG has completed a long period of restructuring and now benefits from a large deposit base and strong capital ratios. The resumption of dividend payments after a 16-year hiatus reflects the strengthening of its balance sheet and operating position, as well as a more stable domestic backdrop.
Within the technology sector, Taiwan Semiconductor Manufacturing Company (Taipei: 2330) provides direct exposure to sustained investment in AI and cloud computing. Increased capital spending by global technology firms has driven demand for advanced semiconductors, where manufacturing capability and scale are critical. As the world’s leading producer of advanced chips, TSMC is a leading beneficiary of this demand. Its technology underpins applications ranging from AI to cloud infrastructure, and its position within global supply chains reinforces Taiwan’s importance as a semiconductor hub. This combination leaves TSMC well placed to benefit as investment in advanced computing capacity continues.
Tencent (Hong Kong: 700) operates one of China’s largest internet platforms, spanning online gaming, digital advertising and cloud services. Earnings growth has been driven by unexpectedly high revenues from gaming, AI-enabled improvements in advertising, and a recovery in the cloud business. The company has also sharpened its focus on capital discipline, reflected in an increased emphasis on dividends and returns for shareholders.
This progress comes despite a more mixed market backdrop in China. Targeted policy measures have recently helped stabilise sentiment, while innovation remains a defining feature of the technology sector. Developments such as the launch of the DeepSeek AI platform underline China’s continued role in AI, supporting longer-term demand for cloud, software and digital services – areas where Tencent remains well positioned.
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