MSCI Emerging Markets Index

The MSCI Emerging Markets Index stands for Morgan Stanley Capital International (MSCI), and is an index used to measure equity market performance in global emerging markets.

The MSCI Emerging Markets Index consists of 23 economies including Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates. The MSCI is a float-adjusted market capitalization index.

Due to the inherent political and monetary risks, emerging markets are considered a risky investment. Emerging markets investors should be prepared to receive volatile returns. While these returns may be significant, there is opportunity for losses to be even larger. Emerging markets allow for diversity in an investor’s portfolio, since they are less involved with already developed markets. This may reduce the overreaching risks associated with them.

Since its inception in 1988, the MSCI Emerging Markets Index has grown significantly. What was once just 10 nations that was represented by less than one percent has increased tenfold. Due to the successes it has achieved, the MSCI is generally used as a performance benchmark for mutual funds and market growth.

Investors can invest directly into the index. Some shares of the MSCI Emerging Markets exchange-traded fund (ETF) own several securities, and are holding approximately 90 percent of the index available on iShares. The Index is expected to experience significant growth in the coming years as citizens from developing markets begin to enter into the market as well.  

Morgan Stanley is no stranger to setting benchmarks. In 2018 the company reported a second quarter growth of 39 percent from just a year prior, pushing their profits up to $2.4 billion, a larger growth than most of their rivals experienced.

After many years of restructuring the bank, Morgan Stanley recently celebrated successes on performance levels across almost all of their business channels. The company did experience a setback earlier in the year when the Federal Reserve completed a stress test on the bank and limited their capital returns to back to the levels from the prior year. Despite this, the bank’s shares are doing well. At a time when many are beginning to worry about changes coming from the Federal Reserve Bank and uncertainty surrounding the future of U.S. foreign trades, Morgan Stanley seems to be steadily moving forward.

This has put a bright spot on the horizon for potential investors who are wary of possible upheaval in market during the coming days.