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Venturing into emerging markets is like setting sail in uncharted waters

Venturing into emerging markets is like setting sail in uncharted waters, where the promise of treasure is as thrilling as the journey itself. These markets, bustling with innovation and youthful energy, are the fertile grounds awaiting seeds of investment. But nothing stays still and that is the problem now.

There has been a significant shift in the composition of the MSCI Emerging Markets index. China’s dominance has been markedly diminished, falling 24.7% by capitalisation. This decline echoes the level last seen in late 2015 following the devaluation of the renminbi.

By contrast, India’s presence in the index has approximately doubled since 2020 and is on course to converge with China. India's weight in the MSCI Emerging Markets Index has doubled due to a policy change that increased foreign investment limits. This was further aided by a strong market recovery of India’s stock market.

China’s weight in the MSCI EM index has slumped, while India’s has doubled

Source: Gavekal Research

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• The global AI economy is rapidly emerging

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• The Yellen Pivot

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