Archive · 30 Jun 2025
Regional Funds in Emerging Markets Outperform Global Benchmarks
Imagine a global stock market for developing countries.
Some areas, like Latin America and Eastern Europe, are doing much better than the average.
This is because the global market is heavily influenced by Asia, which is facing challenges like trade disputes.
Investors are finding success by focusing on specific regions or excluding certain countries from their investments.
These regional funds benefit from factors like currency changes and local events.
Experts suggest that investors should be more selective and consider investing in specific regions rather than just following the general market trend.
Emerging-market regional funds, such as those in Latin America and Eastern Europe, are outperforming the global benchmark.
The MSCI Emerging Markets Index is up over 14%, while Latin America and Eastern Europe sub-indexes are up 25% and 45%, respectively.
Asia, heavily weighted in global indexes, has lagged due to tariff threats and the China-US split.
Regional funds benefit from factors like weaker dollar, stronger currencies, and country-specific events.
Experts suggest a more discerning approach to EM investing, moving away from solely following global benchmarks.
- Who
- Investors and fund managers.
- What
- Emerging-market regional funds are outperforming global benchmarks.
- When
- The gains have been observed recently in the current year.
- Where
- Latin America and Eastern Europe.
- Why
- Due to factors like tariff threats, currency fluctuations, and country-specific events.
Diversification Strategy
Concentration Strategy
Investment Approach
Diversification Strategy
Emphasizing global emerging markets exposure.
Concentration Strategy
Prioritizing regional and country-specific funds to capitalize on local market performances.
- MSCI EM Index
- Up over 14%
- Latin America sub-index
- Up 25%
- Eastern Europe sub-index
- Up 45%
- Asia's weight in global index
- Around 80%
- Top performing regional funds
- Barings' East European, Schroders' Latin America
- Asia's return
- 12%