The Dramatic Evolution of Emerging Markets
What does the dynamic nature of these markets mean for portfolio construction?
Per MSCI, emerging-markets stocks made up about 13% of the global stock market (using the MSCI All Country World Investable Market Index as a proxy) as of the end of 2020. When the MSCI Emerging Markets Index was launched in 1988, these stocks represented less than 1% of the world’s investable equity market capitalization.
Emerging markets are dynamic by definition. They have changed dramatically in the past three-plus decades, and the pace of change has only accelerated in recent years. Here, I’ll look at emerging-markets stocks’ long- and short-term performance, the most recent phase in their ongoing evolution, how their makeup may evolve in the future, and what this all might mean with respect to portfolio construction.
Ben Johnson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.