From the surprise U.K. vote to leave the European Union to Donald Trump's call for tariffs on China and walling off Mexico, the protectionist movement has strengthened this year and prompted worries of recession as cross-border activity declines. The International Monetary Fund on Tuesday warned in its latest world outlook that reversing free trade policies would increase stagnation.
But some strategists say investors are thinking differently about global trends.
Today the world is in "a new structure of globalization — trade replaced by internal demand, ranging from consumption to services," said Pascal Blanque, global chief investment officer at Amundi, which has more than $1 trillion in assets under management. "This is a profound and structural change in this globalization" thinking.
In particular, emerging markets are the way "to get an exposure to those more endogenous, internal demand themes," he said.
The IMF expects a pickup in growth among developing economies to offset a slowdown in advanced economies, resulting in a net increase in global growth from 3.1 percent this year to 3.4 percent next year.