What is '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.

BREAKING DOWN 'MSCI Emerging Markets Index'

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 in the News

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.

RELATED TERMS
  1. MSCI Inc

    MSCI Inc is an investment research firm that provides indices, ...
  2. MSCI BRIC Index

    The MSCI BRIC Index is an index measuring the equity market performance ...
  3. International Investing

    International investing is an investing strategy that involves ...
  4. Europe, Australasia, Far East (EAFE)

    EAFE is an acronym for Europe Australasia and the Far East, representing ...
  5. Emerging Markets Bond Index - EMBI

    The emerging markets bond index is a benchmark index for measuring ...
  6. SPARQS

    A stock participation accreting redemption quarterly-pay security ...
Related Articles
  1. Investing

    4 Funds to Short the MSCI Emerging Markets Index (EUM, EEV)

    Discover several strategies to short The MSCI Emerging Markets Index using these four ETFs.
  2. Investing

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  3. Investing

    A-Shares Finally Earn MSCI Promotion

    China A-shares earned the coveted promotion to be included in MSCI's international benchmark.
  4. Investing

    Durability Seen in Emerging Markets ETF Rally

    Some market observers see more upside for emerging markets, but there are risks to consider.
  5. Investing

    Is this ETF Your Best Bet for Emerging Markets?

    Are emerging markets still emerging? If you believe so, this ETF could be your best bet.
  6. Investing

    Time to Add Emerging Markets to Your Portfolio?

    Now that emerging markets are out of favor, is it time to add them to your portfolio?
  7. Financial Advisor

    How to Play Emerging Markets Rebound with ETFs

    Emerging markets are on the rebound, but not everyone is a believer. Here's how to play it either way with ETFs.
  8. Investing

    Why These Country ETFs Are Soaring

    These country ETFs are soaring, but the good news is probably already priced in.
  9. Investing

    What to Expect in Morgan Stanley Q4 Earnings

    Wall Street expect the bank to report year-over-year increases in both revenue and profits.
Trading Center