The bulls return to emerging markets

The bulls return to emerging markets

The bulls are charging back into emerging markets. The MSCI Emerging Markets index has lagged so far this year, gaining 6.8% to the developed world’s 11.7%. Yet last month it outperformed developed markets for the first time since January, says Bloomberg. The commodity boom has powered the latest rise: materials and energy make up 14% of the MSCI EM index, compared with 8% for the developed market gauge. Global money managers pulled $44bn from emerging markets during the first half of 2020, says Jonathan Wheatley in the Financial Times. But they have since returned in force, pouring more than $100bn into emerging equities and bonds during the nine months to 31 March. An emerging-market economy is one that is moving “from low-to-middle income to high income”, explains Fidelity International on thebull.com.au. The benchmark MSCI EM index is diverse, including east Asian tigers, giants such as India and Indonesia and commodity exporters such as Russia, Brazil and South Africa. Chinese shares make up more than one-third of the index. Emerging markets are distinct from “frontier” economies, says Fidelity. Many countries in …
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