Wallstreetcn.com reports that asset managers such as Pictet, Man Group, and T. Rowe Price are warning that the strongest El Niño event in history poses a systemic risk to global asset allocation. Institutions anticipate a combination of reduced agricultural output, volatile energy prices, and inflationary pressures, which will impact emerging market sovereign debt, real assets, and carbon credit projects in an environment of high interest rates and high debt.

Katie Self, a portfolio manager at Pictet Asset Management, stated that no corner of global asset markets is "completely immune." Analysts at the Anthropocene Fixed Income Institute specifically named the sovereign debt markets of Indonesia, Brazil, and Colombia as particularly vulnerable. T. Rowe Price has developed customized models for its $165 billion emerging market bond and equity portfolios to assess and manage related risks. BNP Paribas Asset Management is also closely monitoring the risk of forest fires in places like Indonesia, evaluating potential losses to its $560 million carbon credit projects.

Some asset managers are also transforming climate risks into investment opportunities. Katie Self's team at Pictet is seeking technology companies capable of coping with extreme weather. The World Meteorological Organization predicts that this strong El Niño event is likely to persist until early 2027.