Crowded EM Trades Draw Warnings From Global Money Managers
Options traders appear to be turning bearish on the Brazilian real, which has delivered carry trade returns of around 30% this year.
Photographer: Anita Pouchard Serra/BloombergSome of the year’s most popular emerging-market trades such as betting on the Brazilian real and stocks linked to artificial intelligence are becoming a source of concern as money managers warn of risks from overcrowding.
Wells Fargo Securities sees valuations for Latin American currencies — among 2025’s top carry trade performers — as detached from fundamentals. Fidelity International is concerned about less liquid markets in Africa that it sees at risk should global volatility spike. Lazard Asset Management meanwhile is keeping its guard up after early November’s fire sale in Asian tech stocks — the worst since April.