what is the msci emerging markets index 
the msci emerging markets index is a selection of stocks that is designed to track the financial performance of key companies in fast growing nations it is one of a number of indexes created by msci inc formerly morgan stanley capital international u s investors who want to buy into global stocks can buy shares of an exchange traded fund etf that mirrors the index there are also many etfs and mutual funds that use the msci emerging markets index as a benchmark for their own performance understanding the msci emerging markets indexthe msci emerging markets index reflects the performance of large cap and medium cap companies in 25 nations all are defined as emerging markets that is their economies or some sectors of their economies are seen to be rapidly expanding and engaging aggressively with global markets the msci emerging markets index currently includes the stocks of companies based in brazil chile china colombia czech republic egypt greece hungary india indonesia korea kuwait malaysia mexico peru philippines poland qatar russia saudi arabia south africa taiwan thailand turkey and the united arab emirates 1the index was created in 1988 at that time companies in only 10 nations were represented today the index is widely used to measure the economic performance of emerging market companies it is also used by emerging market etfs and mutual funds as a benchmark against which to measure their own performance 2msci has a number of indexes that track global stocks including the msci world index which tracks the stocks of developed nations and the msci all country world index which tracks a broad selection of stocks across both developed and emerging nations msci emerging markets index performanceas of december 2021 the msc emerging markets index recorded a one year net return of 2 54 a five year annualized return of 9 87 and a 10 year annualized return of 5 49 since its inception on dec 29 2000 it has returned an annualized 8 97 by contrast the msci world index returned 21 82 in one year 15 03 for the five year period and 12 70 for the 10 year period since dec 29 2000 it has returned an annualized 6 72 the msci acwi index returned 18 54 in the past year 14 40 for the five year period and 11 85 over 10 years its return since dec 29 2000 was 6 68 1investing in the msci emerging markets indexthe msci emerging markets index is not a fund in itself investors can buy shares in exchange traded funds or mutual funds that buy stocks listed in the index however for example the ishares msci emerging markets index etf eem invests at least 80 of its assets in stocks and american depositary receipts included in the index 3 there are several other etfs that mirror the msci emerging market index but the ishares fund is by far the largest 4there also are funds that do not mirror the msci emerging markets index but use it as a benchmark against which to measure their own performance these include avantis emerging markets equity etf avem innovator msci emerging markets power buffer etf january series ejan and innovator msci emerging markets power buffer etf july series ejul 5there are many other choices of emerging market etfs and emerging market mutual funds that track other indexes such as the ftsi emerging markets index these include managed mutual funds that do not mirror an index but do their own stock picking emerging markets are considered a risky investment due to political risks and currency exchange fluctuations investors who turn to emerging markets should expect volatile returns the potential gains are substantial and so are the potential losses they can be used to add some diversity to a portfolio that is heavy on u s assets msci emerging markets index compositionas of december 2021 the index reflected the performance of 1 420 constituents across 25 nations the top 10 were overall the index is heavily weighted in chinese firms at 32 41 of its composition followed by taiwanese at 16 09 and south korea and india at over 12 each in terms of its sector makeup information technology financials and consumer discretionary were dominant 1offers an easy to track benchmark for global growth investingprovides a broad survey of performance in developing economies across the worldfocuses on relatively conservative large and mid cap companiesnot as diversified as other global indexesoriented toward very long term investment horizons short and mid term returns often laginherently high on the risk scale given its focus on emerging marketsmsci emerging markets index faqshere are the answers to some commonly asked questions about the msci emerging markets index like the dow jones industrial average the msci emerging markets index is a selection of stocks each is considered a bellwether in its sector collectively their performance from day to day suggests the overall direction of a market in the case of the msci emerging markets index the stocks are selected as representative of the performance of companies in fast growing developing markets the countries and the stocks in the index change from time to time as of the end of 2021 they include brazil chile china colombia czech republic egypt greece hungary india indonesia korea kuwait malaysia mexico peru philippines poland qatar russia saudi arabia south africa taiwan thailand turkey and the united arab emirates the index is rebalanced twice a year at that time the weighting of any of the 1 400 or so stocks tracked by the index may increase or decrease or it may be dropped altogether 1the msci world marks index tracks the performance of large cap and mid cap stocks in 23 developed nations in north america western europe and the asia pacific region less than 12 of the index was comprised of the stocks in emerging market nations more than half of the index is made up of u s companies 6msci stands for the investment research firm morgan stanley capital international now msci inc which has been a fully independent stand alone public company since 2009 there are more than 200 000 msci indexes that are used to track the performance of industries sectors and regions 7these indexes are used by institutional investors stock pickers hedge fund managers and the media as bellwethers of the performance of the slice of the economy that each tracks the indexes also are used as the basis for etfs which invest in the stocks listed in the index proportionally to their weight in the index other etfs do not mirror an index but use it as a benchmark to measure their own performance msci does not buy the stocks it indexes it makes money from licensing the indexes to the financial companies that create the etfs that mirror them 