Emerging vs. Developed Markets

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Interpretation

Which performed better in recent years, emerging or developed market equities? The ratio in the chart above divides the MSCI Emerging Markets Index by the MSCI World Index. "MSCI" (formerly Morgan Stanley Capital International) has been constructing and maintaining these indices since the late 1960s. Both indices are commonly used as performance benchmarks for equity funds. When the ratio rises, emerging markets outperform developed markets - and when it falls, developed markets outperform emerging markets. The ratio peaked in 1994 and 2010 - and it bottomed in 2001, during the Dot-com mania.

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Further information

MSCI Emerging Markets vs. MSCI World Index

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Interpretation

This chart gives a different view of the same data from the ratio above.
The MSCI Emerging Markets Index consits of 26 developing economies. As of October 2020, the index is most heavily weighted in China at 42.24%, Taiwan at 12.67%, and South Korea at 11.0%.
The MSCI World Index consists of 23 developed economies. As of October 2020, the index is most heavily weighted in the Unites States at 66.8%, Japan at 7.98%, and the United Kingdom at 3.96%.
Both indices are capitalization-weighted and do not include dividends.


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