HSBC Emerging Markets Sentiment Survey - Less bull, more bite

Emerging-market investors are less bullish but more willing to take risk, leaving substantial cash available for deployment if geopolitical or market catalysts improve.

• The 25th survey, conducted from 3 August to 16 September 2026 among 102 investors managing USD424bn of EM assets, shows bullish respondents falling to 50% from 60% in June, while neutral views rose to 44% from 31% and bears returned at 5%.
• Despite softer conviction, the weighted average risk-appetite score increased to 6.6 from 6.1, while average cash holdings rose to 5.7% of assets under management from 4.2%, the highest level since December 2023.
• Positioning could become more supportive because 40% of investors plan to reduce cash over the next three months, compared with 18% previously, while only 11% plan to increase it.
• Net expectations for EM growth acceleration recovered to 45% from 26%, and the share expecting higher rather than lower EM inflation declined to 55% from 80%.
• Geopolitical risk is the leading downside risk, cited by 34%, while easing tensions is the largest upside catalyst at 45%; Asia remains the preferred equity region, Latin America has positive net sentiment across all asset classes, and 56% expect further EM equity gains.

Takeaway: The survey supports a cautiously constructive view on emerging markets, especially if geopolitical tensions ease, but the reduced bullish conviction and continued inflation and US bond-volatility risks argue for waiting for catalysts rather than treating the available cash as an immediate allocation signal.