How did emerging markets perform in 2024?
Emerging markets underperformed their developed counterparts in 2024, but there are signs of recovery. We look at tthe key trends shaping these markets

In a year when US tech stocks made the running, emerging markets (EMs) again underperformed their developed counterparts. But some green shoots are starting to sprout. The benchmark MSCI EM index was up 8% for the year to mid-December – underwhelming compared with the near-19% gain for the equivalent developed-markets index, but the performance gap is smaller than 2023, and much better than the 22% plunge during 2022.
Why have emerging markets underperformed?
The biggest cause of EM sluggishness over the past few years has been plummeting Chinese stocks. But there are now two reasons for optimism. Firstly, China’s share of the MSCI EM index has dropped, down from a peak of almost 40% in 2020 to 27% now. Today’s EM portfolio is thus more geographically balanced. Secondly, China’s market has revived, with the CSI 300 index posting a 16.5% gain for 2024. Few saw that coming, but strong official promises of economic stimulus in the autumn left Chinese investors jubilant.
India, the second-largest component of the EM index, also had another solid year. The BSE Sensex is up 9.5%, although with valuations stretched, global investors have become wary in recent months.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
How the AI revolution impacted emerging markets
As they are heavily weighted towards Asia, emerging markets offer more exposure to technology trends than is often appreciated. Nowhere is this more the case than in Taiwan, this year’s best-performing major EM. The local Taiex index has soared 28% and is up 62% since the start of 2023. The reason? AI mania, which has fuelled demand for Taiwan’s semiconductor manufacturing wizardry. A diversified bet this is not – chip giant TSMC alone now accounts for more than half of the MSCI Taiwan index.
A more surprising AI winner has been Malaysia, where the KLCI index has rallied 10% in 2024. US tech giants have been pouring billions of dollars of investments into cloud and AI facilities in the country, says Patrick Lee for Al Jazeera. After a “lost decade”, Malaysia is enjoying “a moment in the sun”.
The AI story has been very uneven, with only a few companies and countries capturing most of the gains. Thanks to Samsung, South Korea is an important node in the global chip industry, but it’s evidently not the kind of expertise that AI investors currently want. Add in a failed coup attempt and the Korean Kospi is off 8.5%.
Elsewhere in emerging Asia, fortunes have been mixed. Thailand’s SET has endured another dull year, with a 2.5% fall, while the Philippines’ PSEi has been flat. Indonesia’s IDX composite has dropped 4.5% amid signs of softening growth Vietnam’s VN-index enjoyed an 11% gain, but the country is not in many EM trackers because it is still usually classified as a frontier rather than an emerging market.
Political risks rise
It has been a bad year for Latin America’s leading markets as left-leaning presidents frighten away investors. Brazil’s Ibovespa has lost 8% as markets gradually lost trust in president Lula’s ability to keep spending under control. The real currency has lost a fifth against the dollar this year. Bloomberg said that traders in the country are entering “panic” mode. Meanwhile, Mexico’s IPC index is down 12%. The country looks likely to be one of the worst affected by Donald Trump’s tariff plans. But copper champion Chile’s IPSA is up 4%. Among other commodity plays, South Africa’s JSE Top40 has gained 7.5%, while Saudi Arabia’s Tadawul is flat.
Finally, emerging Europe has enjoyed a solid year. Poland’s WIG20 slipped 3.5%, but the Athens ASE index is up another 12% as Greece’s recovery gathers pace. Most impressively, the Czech PX has surged 24%. The Prague market stagnated through the 2010s, but has been enjoying a strong run over the past two years to reach 16-year highs. “Betting that the last shall be first” is “far from a foolproof investing strategy”, says Spencer Jakab in The Wall Street Journal. But “when it comes to beaten-down” EMs, “buying what feels uncomfortable” can sometimes pay off handsomely.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Top 10 areas with the biggest inheritance tax bills – is your town on the list?
People in some of the wealthiest parts of London pay the most inheritance tax – but there are a few areas outside the capital where big bills are paid when a loved one dies
-
Inheritance tax reform ‘largely protects family farms’ – what are the alternatives?
Independent analysis of the government’s inheritance tax reforms has found eight out of 10 farming estates will be able to pay their IHT bill without having to sell off parts of the farm
-
8 of the best properties for sale with shooting estates
The best properties for sale with shooting estates – from an estate in a designated Dark Sky area in Ayrshire, Scotland, to a hunting estate in Tuscany with a wild boar, mouflon, deer and hare shoot
-
The most likely outcome of the AI boom is a big fall
Opinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
What we can learn from Britain’s "Dashing Dozen" stocks
Stocks that consistently outperform the market are clearly doing something right. What can we learn from the UK's top performers and which ones are still buys?
-
The rise of Robin Zeng: China’s billionaire battery king
Robin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
-
Europe’s forgotten equities offer value, growth and strong cash flows
Opinion Jonathon Regis, co-portfolio manager, Developed Markets UCITS Strategy, Lansdowne Partners, highlights forgotten equities he'd put his money in
-
How retail investors can gain exposure to Lloyd’s of London
It’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The flaw in Terry Smith’s strategy at Fundsmith
Opinion Fundsmith has invested in some excellent companies, but it has struggled to decide when to sell, says Max King
-
The goal of business is not profit, but virtue
Opinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins