LAST YEAR, EMERGING MARKET EQUITIES outperformed U.S. equities1, and that trend appears primed to potentially continue in 2026. Even as tensions continue to churn on the world stage, the outlook for 2026 is positive for the asset class, according to the Chief Investment Office (CIO). “Typically, when you see geopolitical activity rise, you get a stronger dollar, not a weaker dollar like we've seen recently,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. “But a weaker dollar benefits emerging markets.”
In the video above, Hyzy and senior investment strategist Lauren Sanfilippo share the reasons behind the CIO’s upbeat view on emerging markets and discuss factors to consider before adjusting your allocation. They also highlight other market trends that could pose risks and potential opportunities for investors in 2026.
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1Source: Bloomberg data from MSCI Emerging Markets and S&P 500 Indexes.
The opinions expressed are as of 1/22/2026 and are subject to change.
Investing involves risk, including the possible loss of principal.
Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility. Investments in emerging- and frontier-markets securities may be subject to greater market, credit, currency, liquidity, legal, political and other risks compared with assets invested in developed foreign countries.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).
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