Emerging market equities have continued their robust rebound into 2026, driven by macroeconomic improvements, tech sector gains, and renewed investor interest, though risks remain amid geopolitical and regulatory uncertainties.
Emerging market equities closed 2025 with a striking rebound and have carried much of that momentum into 2026, driven by a mix of macroeconomic shifts, stronger corporate earnings and growing investor appetite for diversification away from US-dominated markets.
According to MSCI data, the MSCI Emerging Markets Index gained more than 30% in dollar terms through to the end of November 2025, marking one of the best annual showings for the asset class in years and substantially outperforming US shares. Industry reporting shows the surge extended into early 2026, with the index rising nearly 13% year‑to‑date in late February before volatility related to the Middle East reduced some of those gains. MSCI also noted an accompanying rise in dollar‑denominated sovereign bonds, reflecting lower borrowing costs and improving credit metrics in several emerging economies. (MSCI, Euronews)
Market strategists point to several structural drivers behind the rally. A softer US dollar has reduced the burden of dollar‑denominated debt for many emerging market borrowers and, together with expectations of Federal Reserve rate cuts, has eased financing conditions. Goldman Sachs Research and Capital Group both highlighted a backdrop of weaker dollars, firmer company profits and a desire among global investors to rebalance away from extremely expensive US tech stocks as central to continued EM strength. (Goldman Sachs, Capital Group)
Yet the recovery is not uniform. South Korea and Taiwan have been notable outperformers because of their heavy weighting in semiconductors and related technology supply chains. Exchange‑traded products tracking South Korea led early 2026 gains after chipmakers such as Samsung Electronics and SK Hynix posted very strong runs. Taiwan Semiconductor Manufacturing Company remains a linchpin for global AI hardware demand, underscoring how EM exposure can also serve as an alternative route into the AI theme. (Euronews, MoneyWeek)
MoneyWeek interviews captured that investor positioning still leaves room for flows into EM. Mali Chivakul, emerging markets economist at J. Safra Sarasin Sustainable Asset Management, predicted: “2026 will be a year of net inflows into emerging market asset classes”. Marcus Weyerer, director of ETF investment strategy, EMEA at Franklin Templeton, told MoneyWeek that many portfolios remain underweight EM, arguing the case for adding exposure outside the US. Chris Tennant, portfolio manager of Fidelity Emerging Markets, cautioned that while dollar weakness is helpful, improving local capital markets and lower dollar leverage mean EM performance is not solely dependent on further dollar depreciation. (MoneyWeek)
Valuations add to the argument for at least considering EM allocations. Several Asian chipmakers are trading at markedly lower forward price‑to‑earnings multiples than their US counterparts even after large price moves, offering investors cheaper exposure to the semiconductor cycle. More broadly, many emerging markets continue to trade at discounts to developed peers, while commodity‑rich countries have benefited from resilient prices for metals and precious metals. (MoneyWeek, Capital Group)
That said, risks are clear and material. A prolonged escalation in the Middle East could prompt the Fed to slow or pause rate cuts, bolstering the dollar and reversing a key tailwind for EM. Political and geopolitical uncertainties, country‑specific regulatory risks , particularly in China , and the potential for earnings disappointments remain notable headwinds. Morgan Stanley’s NextGen Emerging Markets fund performance versus benchmark returns serves as a reminder that active strategies can lag broad market rallies and that stock‑selection and implementation matter. (MoneyWeek, Morgan Stanley)
For investors seeking access, market participants point to a range of options. Broad index ETFs tracking MSCI EM or FTSE EM indices offer low‑cost, diversified exposure, while active funds and investment trusts can target specific regions or themes such as technology, consumption in India, or commodity exporters. MoneyWeek listed examples of both passive and active vehicles for UK investors; advisers and retail investors should weigh costs, tracking error, and the manager’s country and sector tilts when choosing implementation. (MoneyWeek)
Analysts at Goldman Sachs and others expect the combination of earnings growth, further rate easing in some EM economies and sustained investor demand could support additional upside through 2026, though forecasts vary and hinge on macro developments. Given the mix of opportunity and risk, the current consensus among many institutional voices is that emerging markets warrant a closer look as part of a diversified global equity allocation, provided investors are prepared for higher volatility. (Goldman Sachs, Capital Group)
- https://moneyweek.com/investments/emerging-markets/will-emerging-markets-outperform – Please view link – unable to able to access data
- https://www.msci.com/indexes/markets-in-motion/visualizations/emerging-markets-still-on-top – As of November 30, 2025, the MSCI Emerging Markets Index had risen over 30% in dollar terms, significantly outperforming U.S. equities. This surge was accompanied by a more than 11% increase in EM dollar-denominated sovereign bonds, attributed to falling borrowing costs and improved credit quality. These developments suggest a broad-based, macro-supported recovery in emerging markets, potentially indicating a longer-term shift in market leadership. ([msci.com](https://www.msci.com/indexes/markets-in-motion/visualizations/emerging-markets-still-on-top?utm_source=openai))
- https://www.euronews.com/business/2026/02/24/why-are-emerging-markets-rallying-in-2026 – In early 2026, emerging markets exhibited strong performance, with the MSCI Emerging Markets Index up nearly 13% year-to-date. This rally was driven by factors such as strong company earnings, a weaker US dollar, and increased demand for geographical diversification. Notably, South Korea’s iShares MSCI South Korea ETF (EWY) led the rally, up 43.28% year-to-date after a 96% surge in 2025, reflecting the dominance of chipmakers like Samsung Electronics and SK Hynix. ([euronews.com](https://www.euronews.com/business/2026/02/24/why-are-emerging-markets-rallying-in-2026?utm_source=openai))
- https://www.goldmansachs.com/insights/articles/emerging-markets-stocks-and-currencies-are-forecast-to-rally – Goldman Sachs Research forecasted that emerging market equities would continue to rise through the end of 2025, supported by strong company earnings, a weaker US dollar, and demand for geographical diversification. The MSCI Emerging Markets Index was projected to reach 1,480 over the next 12 months, up from 1,373 as of October 9, 2025. Earnings from EM companies were expected to grow 9% in 2025 and 14% in 2026, with stocks in South Korea, Taiwan, and China offering exposure to burgeoning technology sectors. ([goldmansachs.com](https://www.goldmansachs.com/insights/articles/emerging-markets-stocks-and-currencies-are-forecast-to-rally?utm_source=openai))
- https://www.capitalgroup.com/advisor/insights/articles/emerging-markets-2026-can-rally-keep-rolling.html – Capital Group highlighted that emerging markets had outpaced U.S. equities, with the MSCI Emerging Markets Index returning 30% by December 1, 2025. Earnings growth across most emerging markets appeared promising, with projections of double-digit profit increases year over year. Central banks in many EM countries were poised to cut interest rates, potentially benefiting local equity markets. Inflation was under control, and in some countries, it was much lower than in developed markets. ([capitalgroup.com](https://www.capitalgroup.com/advisor/insights/articles/emerging-markets-2026-can-rally-keep-rolling.html?utm_source=openai))
- https://www.morganstanley.com/im/en-se/institutional-investor/funds-and-performance/morgan-stanley-investment-funds/emerging-market-equity/nextgen-emerging-markets.html – As of January 31, 2026, the Morgan Stanley NextGen Emerging Markets Fund reported a 1-year return of 18.83%, compared to the MSCI Frontier Emerging Markets Net Index’s return of 34.81%. Over the past three years, the fund achieved a return of 13.08%, underperforming the index’s 17.15%. The fund’s performance reflects its investment strategy and the dynamics of emerging markets during this period. ([morganstanley.com](https://www.morganstanley.com/im/en-se/institutional-investor/funds-and-performance/morgan-stanley-investment-funds/emerging-market-equity/nextgen-emerging-markets.html?utm_source=openai))
- https://www.youtube.com/watch?v=Kv4BGDzULDA – This video analyses the rally in emerging market stocks, attributing it to Federal Reserve rate cut expectations and strong earnings optimism. It discusses the performance of the MSCI Emerging Markets Index, year-to-date gains, and implications for investors. The video provides insights into the factors driving the rally and its potential sustainability. ([youtube.com](https://www.youtube.com/watch?v=Kv4BGDzULDA&utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article was published on 3 March 2026, making it current. The content references data up to late February 2026, indicating recent information. However, some of the data points, such as the MSCI Emerging Markets Index gaining over 30% through November 2025, are based on earlier reports. The article does not provide specific dates for the interviews with Mali Chivakul, Marcus Weyerer, and Chris Tennant, making it difficult to assess the freshness of these insights. Additionally, the article includes information from sources like Goldman Sachs and Capital Group, which have published similar analyses in late 2025. While the article presents a synthesis of recent data, the inclusion of older data points and unspecified interview dates slightly reduce its freshness score.
Quotes check
Score:
6
Notes:
The article includes direct quotes from Mali Chivakul, Marcus Weyerer, and Chris Tennant. However, without specific publication dates for these quotes, it’s challenging to verify their originality. The phrasing of these quotes does not appear verbatim in the provided search results, suggesting they may be original. Nonetheless, the lack of verifiable sources for these quotes raises concerns about their authenticity.
Source reliability
Score:
7
Notes:
The article is published by MoneyWeek, a UK-based financial publication known for its investment insights. While MoneyWeek is reputable within its niche, it is not as widely recognized as major news organizations like the BBC or Reuters. The article cites sources such as Goldman Sachs and Capital Group, both of which are reputable financial institutions. However, the article does not provide direct links to these sources, making it difficult to independently verify the information.
Plausibility check
Score:
8
Notes:
The article discusses the performance of emerging market equities, citing data from reputable sources like Goldman Sachs and Capital Group. The claims about the MSCI Emerging Markets Index’s performance and the factors influencing this trend are consistent with known market dynamics. However, the article does not provide specific data points or direct links to the cited sources, making it challenging to fully verify the claims.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article provides a current overview of emerging market equities, citing reputable sources and presenting plausible claims. However, the lack of specific publication dates for some data points and quotes, as well as the absence of direct links to original sources, raises concerns about the freshness and verifiability of the information. While the content is not behind a paywall and appears to be a factual news report, the medium confidence reflects these uncertainties.