261. Why are global investors looking to Asia as an investment destination?
Episode Description:
Asia has often been viewed as a long-term growth story, but its role in global markets is becoming more immediate. The region now represents a significant share of global GDP and listed companies, while operating across distinct economic and policy cycles.
In this episode of The Bid, Oscar Pulido speaks with Aarti Angara, Head of Global Product Solutions in Asia Pacific at BlackRock. They examine why Asia is gaining more attention from investors and how opportunities are developing across equities and fixed income.
The conversation highlights the region’s diversity across countries, sectors, and growth drivers. It also explores themes such as AI-related manufacturing, domestic consumption in emerging markets, Japan’s shift in corporate behavior, and the role of Asian bond markets in diversification
Key insights:
How Asia’s scale is influencing its role in global portfolios
Why policy and economic cycles differ across the region
Where AI-related manufacturing is concentrated
How domestic consumption is developing in India and Southeast Asia
Why Japan’s corporate and inflation dynamics are drawing attention
How Asian fixed income behaves differently from developed markets
Keywords: Asia investing, APAC markets, Asian equities, Asian fixed income, Japan economy, AI supply chain, emerging Asia, portfolio diversification, Asia equity markets
Sources: Bloomberg May 12th 2026,
Keywords: Asia investing, APAC markets, Asian equities, Asian fixed income, AI supply chain, Japan investing, portfolio diversification, emerging Asia
Written Disclosures In Episode Description:
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to any company or investment strategy mentioned is for illustrative purposes only and not investment advice. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures.
<<TRANSCRIPT>>
Oscar Pulido: For many years, Asia has been framed as the future of global growth, always important, but often treated as optional in portfolios. But that narrative is starting to shift.
Today, Asia sits at the center of some of the biggest forces shaping markets, from the build-out of artificial intelligence to the rewiring of global supply chains and the rise of domestic consumption across the region. Yet at the same time, Asia is moving to a different macro rhythm than the US and Europe, creating a set of opportunities that look increasingly distinct from developed markets. So, the question for investors is no longer just why Asia, but what role should it play in a portfolio today?
Welcome to The Bid, where we break down what's happening in the markets and explore the forces changing the economy and finance. I'm Oscar Pulido.
Today I'm joined by Aarti Angara, Head of Global Product Solutions in the Asia Pacific region at BlackRock. We'll discuss why Asia is moving from the sidelines- to the core of global portfolios, where the most compelling opportunities are emerging across equities and fixed income, and how investors should think about navigating one of the most dynamic and diverse regions in the world.
Arti, thank you so much for joining us on The Bid.
Aarti Angara: Oscar, thank you so much for being here in Singapore. It's really wonderful to host you.
Oscar Pulido: Well, we are here in Singapore. I actually got off a very long flight, this morning. But since we're in Asia, let's talk about the region. This is a region that has been, thought of as a high-growth area for many decades, and it feels like it's a region that is becoming more central to the portfolio conversation today. So talk a little bit about what's driving that. Why is there increased interest of investing in APAC?
Aarti Angara: So, look, what I'd say is, it's less about what's changed vis-a-vis the potential of Asia and more that. there has really been a change in the recognition of Asia in the here and now. And let me unpack that in three vectors. So firstly, it's about scale. , and that's up from twenty percent as recently as and interestingly, . So, it really isn't a future story anymore. It really is here and now.
The second is about relevance. When you think about Asia being at the confluence of global growth vectors, when you think about AI, a lot of the investment that's happening behind the AI thematic is in the physical layer. So, think semis, think hardware, think manufacturing, and that's where Asia really shines. But it's more than that. Asia plays really well into the retooling of global supply chains, and then there is a strong domestic consumption thematic. So, really at the confluence of these global growth drivers. And then third, I'd say that there's a retooling in global mindsets. I think when you look at historical portfolios, they've often tended to be concentrated in a couple of regions, and I think there's a recognition that we do need more diversification.
And that's not just across asset classes, but it is really diversification across vectors of growth, and that's where Asia comes in really beautifully. And so I think the conversation has shifted from Asia as a potential future growth story to a recognition of where Asia is today.
Oscar Pulido: And part of the reason it's a current story, you mentioned that just from a pure size perspective, the number of companies, the GDP growth. You also touched on investors have thought about other regions perhaps when investing their portfolios. I have to imagine maybe that's the US, that's Europe, and maybe they've thought of Asia, after that. But right now we're seeing a lot of divergence in terms of how these various regions are performing economically. So, talk a little bit about, how would you think about that divergence and why does it matter in the current environment?
Aarti Angara: Yeah, look, I think that's excellent question, and you've hit the nail on the head. So, Asia really is beholden to a different economic and policy cycle than a lot of the other developed markets. When you came into 2026 and you looked at countries in Asia, the inflation outlook in most of these countries was a lot more benign. In a lot of these countries, inflation was already either below or at central bank targets. And what that means is it just gives policymakers here a lot more flexibility.
It also means that they're not all responding at the same time to the same set of macro forces, so I think that's one of the things that, that's playing out in Asia's favor. the other thing I'd say is just the structural composition of some of these economies. So structurally, a lot of these economies have companies that are geared much more to domestic consumption, and that tends to insulate them from some of the global shocks.
So, you put those two things together, and you really have a region that's at the confluence of these growth vectors but also is moving in different regimes from a macroeconomic and policy cycle.
Oscar Pulido: And even that first point that you mentioned about inflation being at a different cycle versus other regions, because in the US, one of the big questions has been, will the Fed be able to cut interest rates? And in fact, the inflation outlook has forced them to stay where they are and maybe even have to raise interest rates if inflation- is more persistent, but you're saying in Asia that's a little bit different.
Arti, you've also talked about Asia as a region that is not only growing but can be a source of diversification. So how can one region play both of those roles at the same
Aarti Angara: Yeah, that's an excellent question, and a conundrum indeed, right? I think the key point here is that Asia is not one region. It's not homogenous, and it's actually a lot of different growth vectors that are operating in parallel. So if you take a step back and just deconstruct the composition of Asia, you have developed markets like Japan and Korea, and then you have large emerging markets like China and India, and then you have the faster-growing economies of Southeast Asia.
And each of these are geared towards different growth vectors, whether that's, demographics or technology, policy, or domestic consumption. So let me unpack that market by market a little bit. When you think about North Asia, you have advanced manufacturing and semis, and we talked about that with the AI thematic earlier.
And then you think about South and Southeast Asia, these are large populous countries, growing incomes, increased urbanization, and that leads to domestic consumption. And then you have my personal favorite, Japan, which just has the most remarkable things happening there, right? You're seeing a structural shift in Japan in the way that the corporates retooling their mindsets.
They're really thinking about shareholder returns. Everything that you've seen play out in Americas for so many years, but shareholder returns, capital efficiency, and putting shareholders at the front and center. But really the most exciting thing that's happening in Japan is a once in a generation shift from deflation to inflation.
So, all of this, not only does that mean that you have different growth vectors, but that then plays out in the stock markets. You see a dispersion of returns in the different markets. and so, look, one region that has not one growth driver, but many, and so it can actually provide you both growth and diversification in a portfolio.
Oscar Pulido: And as you were going through all those countries, I was thinking they're so different demographically. they're of course different size in terms of population, in terms of the growth rates, and in terms of the stock market opportunities.
And perhaps that's a good time to pivot, because we've spent a lot of our conversation talking more about the macro and the economic backdrop. When you look across Asian equities today, what are some of the opportunities that you find interesting, e-either that from a country, a sector, or thematic perspective?
Aarti Angara: Oscar, do you have children?
Oscar Pulido: I do. I have two children. I hope they're listening to this!
Aarti Angara: You know, you're not allowed to pick your favorite children.
Oscar Pulido: Right!
Aarti Angara: So I'm going to run with that theme, okay? So, I'd say, look, there are three themes that I'm really excited about in Asia. The first I talk about is the AI enabler trade. and we've touched on that earlier, but a lot of where the AI investment is actually going is in that physical layer.
It's in the semi’s, it's in hardware, it's in manufacturing, and it's countries like Korea and Taiwan that are really deeply entrenched in those ecosystems. And some of these numbers, I have to tell you, are staggering. . And I did just recently check my Bloomberg, and I noticed that Samsung now is more than a trillion dollars in market cap. So, it's just staggering what's happening here. And then you have, countries like Australia and India, and I think people would say, not really geared to the AI trade, but I'd beg to differ. So, I'd say Australia really plays the second derivative of the AI trade. I talk about that as the critical minerals trade. And what I mean is, when you think about ali and copper and the role that they have to play in electrification, when you think about lithium and the role that it plays in power storage, and then when you think about rare earths and defense and other applications that rare earths are needed for Australia's really geared to all of those thematics, so the second derivative.
And then conventional wisdom will tell you that India is not at all geared to AI, but I think the one thing that most people don't know is this massive data center build-out that's going to happen in India over the next several years, and that's going to lead to a whole new complex of industrial CapEx companies. So, not sexy stuff, but think gensets, think transmission, think, renewables, but again, geared to the AI enabler trade. So that's one thematic that I'm really excited about. The other we talked about already, right? That's domestic consumption, and when you think about India, when you think about Southeast Asia, these are very populous countries. They're also going through increased urbanization, and with that comes also rising incomes. And so, when you put those two things together, increased demand for financial services. increased demand for healthcare. You see increased demand just for consumption plays, and some of these consumption plays, they're staggering. A lot of the internet companies that you see in India, they're really cutting-edge, and they're enabled by the payment systems. So a lot of Tech-heavy, exciting domestic consumption leverage plays.
And then finally, Japan. And I do like Japan not just because of the sushi, although I am partial to sushi. But look, I touched upon some of this, for the first time in a long time, Japanese companies are now being shareholder-friendly. They're thinking about balance sheets, they're thinking about capital efficiency and putting shareholders at the front and center. But it is that generational shift for a developed market that seldom happens, right? Where you move one eighty degrees, from thirty years of deflation to inflation, and actually one market where inflation is a good thing. and what that results in is, look, if you think about Mrs. Watanabe. Mrs. Watanabe's smart decision has been to hold cash in a deflationary environment. And so, as a consequence of that, you have seven trillion dollars of cash sitting on the sidelines. And now inflation's back, and you have to believe that cash, or at least some of it, is going to come and look for investment returns, and some of that is going to come and look for returns closest to home, so into the Japanese equity markets or into the fixed income markets.
So, Japan is a unique large market that has its own set of growth vectors. And then when you look at the earnings growth in each of these markets, robust earnings growth, but very, benign valuation, especially compared to the US. So, I can't pick my favorite children, but lots of children to pick from here.
Oscar Pulido: I was going to say, I can see why you don't want to pick your favorite children, because there's a lot of characteristics about each of these countries that, is what makes it interesting. You mentioned the AI theme is a commonality that seems to touch a lot of these countries, but you also mentioned some very different structural drivers in these countries.
Japan, more of a renaissance, more of a story around shareholder-friendly practices, and markets like Korea that are benefiting from high growth in the tech sector. Arti, we're here in Singapore, and, you have a colleague here named Navin Saigal, who has been a guest on The Bid in the past. And when we talked to Navin, we talked about the fixed income markets in Asia. So, let's talk why the Asian bond markets are getting more attention globally and what differences or similarities should we think about when comparing them to the developed markets?
Aarti Angara: Yeah, so look, I think what you're seeing in Asian fixed income is similar to what you're seeing in Asian equities, quite frankly.
And what I mean by that is when you unpack, the mix of return drivers, there's some variance versus developed markets. So, let's just start with diversification first. In some market environments, Asian fixed income and Asian bonds tend to show little or even negative correlation to U.S. Treasuries. And so, what that means is when you put them into portfolios, they just behave differently, and that provides a great source of diversification. And then there's income. Large parts of the credit market here have attractive yields and often with lower duration, which means that they're not that sensitive to interest rate moves.
And finally, we talked about this earlier, but Asian countries they're operating under different economic and policy backdrops, and so Asian fixed income goes through its own cycle of a rate path and policy responses. and look, we're seeing some of this come through in flows as well.
So, we have seen consistent flows into Asian fixed income, even when the flows into emerging markets fixed income complex has been more nuanced. So, look similar thematics to what you're seeing in the Asian equity complex.
Oscar Pulido: And one of those commonalities is that a difference in the economic cycle can lead to differences in how maybe interest rates look like in Asia, and therefore, that can certainly impact the bond market very heavily, given just how sensitive the fixed income markets are to interest rates,
So Aarti, you've talked about how Asia, while it is one region, there are a lot of different countries that have a lot of different dynamics going on, Japan versus Korea, or, developed markets versus an emerging market in the Asia Pacific region. When it comes to an investor who's thinking about allocating to Asia in a portfolio, how do they navigate that fragmentation that exists across countries?
Aarti Angara: I'd say that, exactly the things that make Asia exciting and worth focusing on today, are also the reasons that make Asia more complex to navigate, right? It's two sides of the same coin. You have different currencies, you have different regulatory setups, political regimes, and different stages of development. and with that, as we've spoken about, comes dispersion of returns. But when you have dispersion of returns, you also have opportunities.
So what I'd say is investors definitely have to be much more selective, and we are seeing this in a shift in the global mindsets. Investors are no longer thinking about Asia as one broad regional exposure. They're being much more nuanced and precise in how they access Asia, whether that's from a country lens or a sector lens or a thematic lens, but also more importantly, from what role does this exposure play in my portfolio? And so, yes, it is more complex. It does need more selectivity, but it also has the toolkit to allow you to navigate that complexity.
Oscar Pulido: And as we talked about, it's a region that can uniquely offer both growth and diversification and a region that, perhaps investors should be looking at more closely. And so, Aarti, looking ahead, what do you see the role that Asia is going to play in global portfolios over the next few years? Or maybe even take us further out in the future. what's the next chapter of this story telling you?
Aarti Angara: look, I think we're definitely entering the next phase of this story, where Asia gets its well-deserved place as a structural part of global portfolios.
I think that there is a recognition, that Asia needs to be viewed as its own allocation alongside the US and Europe, and a move from the core-- from the periphery, pardon me, to the core, and I think we're going to start seeing that. the other thing I think we're going to start seeing is what I touched upon before, where investors are going to become much more nuanced in how they access Asia.
So, this is not going to be a broad regional exposure, but it's going to be much more precise. It's going to be around countries, around sectors, around thematics, and also around what you're hoping to get with allocating to Asia in your portfolio. and lastly, I'd say it's more about balance, right? and this is a comment on the global landscape.
So, as we're seeing growth vectors across the region distribute globally, and also as we are seeing micro forces diverge, I think both of those things lead to, a role for Asia in portfolios, not as adding risk to portfolios, but as adding a different source of growth when you're thinking about building a resilient portfolio.
So, I think really the second phase of this story moves from no longer why Asia, to how do I make Asia a core part of my portfolio to build resilience and growth?
Oscar Pulido: Arti, I touched on the fact that, I arrived in Singapore this morning. It's not my first time here. I was reminded very quickly when I stepped out of the airport how hot it is in Singapore, given that it sits basically on the equator.
And by the way, the sun wasn't up when I stepped out of the airport, it was already very warm. But for somebody who hasn't been to Singapore in their life, what would you tell them about what to expect when they land here?
Aarti Angara: So, I'd say some tips from a local, if you're going with haircuts, definitely favor Oscar's haircut versus mine, unless hair frizz is something that you're going after. But one of the things that people don't know about Singapore, and this is counterintuitive, is that the local food here is extremely spicy. But it actually makes sense. It's intended to make you sweat as you're eating, and when you sweat, you then cool down So spicy food, bad hair days, but consistency in the weather. And Singapore is a vol dampener in your travels. You know exactly what to pack. It's the same every day. You know exactly what to expect.
Oscar Pulido: That's right. It's consistently hot, and, I think I will probably get a good taste of that, spicy food in the coming days. Arti, thank you so much for taking us around the Asia-Pacific region and sharing your views on what's going on and the investment opportunity. And thank you for doing it with us here on The Bid.
Aarti Angara: Oscar, thank you so much for having me it was a pleasure
<<SPOKEN DISCLOSURES>>
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to the names of each company mentioned is merely for explaining the investment strategy and should not be construed as investment advice or recommendation. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures
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