EM vs. EUR: Diverging trade trends

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EM vs. EUR: Diverging trade trends

Lower risk taking, preference for UTI and FIN continues

Cash levels declined to 5.9% in July, from 6.4% last month, but remain slightly above the

historical average. At the same time, risk appetite and equity exposure fell below

historical norms. Positioning continues to favor quality and value, with Financials and

Utilities the most overweight sectors, while Consumer Discretionary and Materials

remain the most underweight.

Still constructive on Argentina; Colombia leads Andeans

Investors remain constructive on Argentina, although the share with a neutral is almost

as large. Within the Andean region, investors expect Colombia to outperform. Copper

prices are considered to be the main risk for Andeans.

Exhibit 18: Which sectors within equities are you most overweight? Exhibit 19: Which sectors among equities are you most underweight?

Participants are most overweight financials Participants are more underweight than they are overweight in cons.

discretionary, cons. staples, materials, and energy.

Financials

Utilities Utilities

Consumer Discretionary Consumer Discretionary

Energy Energy

Industrials Industrials

Materials Materials

Overweight Communication Services Jul-26 Communication Services

Consumer Staples Jun-26 Consumer Staples Underweight

0% 10% 20% 30% 40% 0% 10% 20% 30% 40%

Source: LatAm Fund Manager Survey Source: LatAm Fund Manager Survey

BofA GLOBAL RESEARCH BofA GLOBAL RESEARCH

Exhibit 20: Which strategies do you believe could outperform over the Exhibit 21: What are your expectations for the USD in 2026?

next 6 months? Most participants expect a stronger USD in 2026.

High quality and value are the favorite strategies.

High quality Stronger USD

Value Jul-26

High dividend yield

Jun-26

Low volatility / low beta Unchanged

Jul-26