13/11/2026 03:11 AST
For UAE investors holding global stocks, the latest selloff in artificial intelligence-linked companies raises a question: where can they find opportunities without depending heavily on a handful of technology giants?
Fund managers are looking towards emerging markets, where lower valuations, higher dividend yields and businesses less exposed to AI spending are attracting interest.
The selloff exposed the concentration of emerging-market benchmarks. South Korea's SK Hynix and Samsung Electronics, together with Taiwan Semiconductor Manufacturing Co. (TSMC), account for almost 30% of MSCI's main emerging-market index.
Their declines pushed the benchmark to a seven-month low on Friday before it recovered. The index trades at around eight times expected earnings, less than half the S&P 500's multiple, while offering roughly twice the dividend yield, Bloomberg-compiled data show. Its low valuation partly reflects sharply higher earnings forecasts for AI companies.
"Many non-tech sectors and markets in EM offer stronger long-term growth than their US counterparts, at significantly more attractive multiples," Maxence Visseau, Chief Investment Officer at Dubai-based Arkevium Capital, told Bloomberg.
Here are six areas attracting investors seeking alternatives to AI-heavy portfolios.
1. India: An alternative to AI-heavy Asian markets
India is attracting investors seeking to reduce exposure to semiconductor stocks. Its NSE Nifty 50 rose 2% on Friday, completing its strongest week since 2021, while several other Asian markets declined.
Foreign equity inflows were on course for a weekly record, despite Indian stocks trading at higher valuations than many emerging-market peers.
"The no-brainer anti-AI trade should be India," said Bing Yuan, a fund manager at Edmond de Rothschild who recently increased her exposure.
"If you want to switch out from AI, it should be a candidate," she told Bloomberg.
For UAE investors holding Indian equities, the distinction is between domestic-market exposure and technology companies facing potential disruption from AI. Yuan remains cautious about India's IT services sector, while relatively expensive valuations present another consideration.
2. China and Hong Kong: Dividend-paying stocks
Some fund managers favour Chinese and Hong Kong-listed companies offering higher dividends rather than rebuilding technology positions.
Sat Duhra, a portfolio manager at Janus Henderson Investors, said he had been adding higher-yielding shares, citing "improving payout discipline".
"Just hogging three or four names and being really concentrated actually doesn't work over the long term," Duhra told Bloomberg.
"There's a whole bunch of other areas outside of AI that have worked really well, and that's where we positioned."
For UAE investors seeking income, dividend-paying businesses offer an alternative to companies valued primarily on future earnings expectations. Dividend sustainability and share-price movements remain important when assessing returns.
Gulfnews
Please wait...
