Line chart showing the MSCI Emerging Markets Index and the MSCI Emerging Markets ex-China Index from February 17, 2021, to March 31, 2024. Both data series are indexed to 100 as of the start date. The chart shows that China stocks have dropped over 60% over this period compared to a roughly 3% decline in the S&P 500 Index.
Sources: Bloomberg and Wells Fargo Investment Institute. Daily data from February 17, 2021, to March 31, 2024. EM = emerging markets. MSCI Emerging Markets Index is a free-float-adjusted market-capitalization-weighted index designed to measure equity market performance of emerging markets. MSCI Emerging Markets ex China Index is a free-float-adjusted market-capitalization-weighted index designed to measure equity market performance of emerging markets excluding China. Index returns do not represent investment performance or the results of actual trading. Index returns represent general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. Equity securities are subject to market risk which means their value may fluctuate in response to general economic and market conditions and the perception of individual issuers. Investments in equity securities are generally more volatile than other types of securities. Investing in foreign securities presents certain risks not associated with domestic investments, such as currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility. These risks are heightened in emerging markets.
Key Takeaways
- Emerging Markets (EMs) have lagged over the past few years. The struggles of China stocks have masked pockets of strength in other areas of EM.