MSCI Emerging Markets Index

AAA

DEFINITION of 'MSCI Emerging Markets Index'

An index created by Morgan Stanley Capital International (MSCI) that is designed to measure equity market performance in global emerging markets.

The Emerging Markets Index is a float-adjusted market capitalization index that consists of indices in 21 emerging economies: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

INVESTOPEDIA EXPLAINS 'MSCI Emerging Markets Index'

Emerging markets are considered relatively risky because they carry additional political, economic and currency risks. They certainly aren't for those who value safety and security above all else. An investor in emerging markets should be willing to accept volatile returns - there is a chance for large profit at the risk of large losses.

An upside to emerging markets is that their performance is generally less correlated with developed markets. As such, they can play a role in diversifying a portfolio (and thus reducing overall risk).

RELATED TERMS
  1. Diversification

    A risk management technique that mixes a wide variety of investments ...
  2. Index

    A statistical measure of change in an economy or a securities ...
  3. Emerging Market Economy

    A nation's economy that is progressing toward becoming advanced, ...
  4. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
  5. Country Risk

    A collection of risks associated with investing in a foreign ...
  6. Political Risk

    The risk that an investment's returns could suffer as a result ...
RELATED FAQS
  1. Are there critics of the human development index (HDI)?

    The human development index (HDI) assigns numerical values to different countries as a measure of human prosperity. These ... Read Full Answer >>
  2. What telecommunication companies have the largest exposure to emerging markets?

    The telecom companies with the most exposure to emerging markets are usually the ones that are politically favored. More ... Read Full Answer >>
  3. What does it mean when a country has little activity in its capital account?

    Since a country's capital account represents money flow into the country through foreign investment, having only a small ... Read Full Answer >>
  4. What emerging markets are best suited for investing in the aerospace sector?

    The two best emerging markets for investing in the aerospace sector are China and India. Both countries have a rapidly expanding ... Read Full Answer >>
  5. What are some common risks that are unique to investing in the electronics sector?

    The electronics sector presents several potential risks for investors. Variable costs associated with production may vary, ... Read Full Answer >>
  6. What impact will growth in the emerging markets have on automotive sector?

    Continuing economic growth in the emerging market economies should have a very positive impact on the automotive industry ... Read Full Answer >>
Related Articles
  1. Investing Basics

    The Five Biggest Stock Market Myths

    Stocks that go down must come up, right? Wrong. We bust this myth and four other common market misconceptions.
  2. Mutual Funds & ETFs

    Go International With Foreign Index Funds

    As global trade continues to expand and the world's economies grow, spice up your portfolio with these exciting opportunities.
  3. Economics

    What Is An Emerging Market Economy?

    Emerging markets provide new investment opportunities, but there are risks - both to residents and foreign investors.
  4. Bonds & Fixed Income

    Does International Investing Really Offer Diversification?

    Historically, international investing has worked out well for investors, but this may no longer be the case.
  5. Options & Futures

    An Introduction To Emerging Market Bonds

    The rewards associated with this fixed-income asset are significant, but so are the risks.
  6. Investing

    Why International Diversification Matters Today

    Given the breadth and diversity of the U.S. economy and market, many U.S. investors feel comfortable keeping their money within U.S. borders.
  7. Economics

    Understanding Green Field Investments

    A green field investment refers to a company, usually a large multi-national corporation, building a new facility in a foreign country.
  8. Investing News

    Cost-Free Connection Of Target Groups To Marketers

    ZipDial spotted a niche marketing opportunity in the area of “missed calls” and developed a business around it. Here is how ZipDial works and its benefits.
  9. Investing News

    The Funds Keep Flowing Into Indian Tech Startups

    Investors are increasingly turning their attention to Indian tech startup companies. Billions of dollars are flowing into the startup sector in India.
  10. Mutual Funds & ETFs

    Is the PowerShares (PFEM) ETF a Good Bet Now?

    What you need to know if you are considering trading PowerShares Fundamental Emerging Markets Local Debt ETF.

You May Also Like

Hot Definitions
  1. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
  2. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  5. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  6. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
Trading Center