This $48.7 billion in AUM fund manager bets on Indian equities for 2026

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Ashmore Group, the specialist emerging market (EM) asset manager that manages $48.7 billion (as of quarter ended September 2025) is betting on a turnaround in Indian equities in 2026.

 

After a cyclical slowdown in 2025, wrote Gustavo Medeiros, head of research at Ashmore Group in a 2026 market outlook report, macroeconomic indicators in India are looking increasingly positive with credit demand improving, investment rising again and rates likely to fall further in 2026 with inflation contained.

 

However, the country, Medeiros wrote, may still face temporary headwinds, driven by large global fund managers cutting their underweight in China, funded by India. "But we are close to the point, in terms of valuations, that Indian markets become attractive as well and regains our preference in the largest EM equity markets,” he added. 

 

On the economic front, meanwhile, India's economy as measured by gross domestic product (GDP) grew at 8.2 per cent during July-September period of fiscal 2025-26 (FY26). This growth, data shows, was led by the manufacturing sector, which grew 9.1 per cent during the period under review (7.7 per cent in Q1) despite US tariff-related concerns.

 

Growth momentum

 

EM growth momentum, Ashmore believes, is broadening across regions – Asia, Latin America, Eastern Europe and Africa – as structural reforms, policy adjustments and resilient economic performance are improving macro stability, driving sovereign rating upgrades and renewed investor inflows. 

 

Latin America, Medeiros said, is seeing a broad ‘blue wave’ of more market-friendly governments, which will likely lower risk premia and support investment across the region. Frontier markets are also benefiting from ongoing stabilisation efforts.

 

"This supportive backdrop underpins Ashmore’s expectation of continued EM outperformance in 2026, driven by resilient economic performance, attractive valuations in local markets and favourable technicals," Medeiros said. 

 

On the policy front, peak US tariff risk, Ashmore notes, appear to be in the rearview mirror with new narratives around an accelerating AI capital expenditure super-cycle and China’s renewed export-led development strategy are emerging as the most important dynamics shaping the global landscape as financial markets head into calendar year 2026 (CY26).

 

These forces, Medeiros believes, will help ease price pressures worldwide, sending a wave of disinflationary supply into global markets and giving central banks greater room to cut interest rates in 2026. 

 

"This, alongside a re-evaluation of ‘US exceptionalism’ and softening of the US dollar, has kept global financial conditions accommodative, creating an environment that both supported emerging market (EM) outperformance in 2025 and is expected to provide a constructive backdrop again in 2026," Medeiros wrote.