Can emerging markets’ stellar run continue?

Feb 4th 2026|4 min read

For much of the past 20 years emerging markets (EMs) have seemed doomed never to emerge. The world’s up-and-coming economies were supposed to offer daredevil investors a shot at outsize returns: the chance to profit from the superior growth of middle-income countries as they caught up with rich ones. Sure enough, the IMF reckons that emerging and developing economies, on average, have increased their output faster than advanced ones every year this century, often by several percentage points. Yet after a terrific boom in the 2000s their stockmarkets had, until recently, generated lousy returns. It took until 2021 for MSCI’s index of EM shares to reattain its peak from 2007—only quickly to crater again, by over 40%.