MSCI Emerging Markets Index

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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. MSCI Inc

    An investment research firm that provides indices, portfolio ...
  4. Emerging Market Economy

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

    The total dollar market value of all of a company's outstanding ...
  6. Political Risk

    The risk that an investment's returns could suffer as a result ...
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