As the dust of the 2024 sandstorm begins to settle, an air of uncertainty again surrounds emerging markets heading into the new year. With policy action in the US and China likely to set the tone in the coming months, the asset class is contending with a number of unknowns.
Hopes for the end of a lost decade of returns once more failed to materialise this year. The MSCI Emerging Markets index was up around 10 per cent in sterling terms as at 6 December. Ordinarily this would be strong enough, but this year it trailed far behind the MSCI World and S&P 500, which rose 23 and 28 per cent, respectively.
Once more, fortunes diverged widely by market. The standout performances were put in by Taiwan and India, as countries across Latin America faltered. Meanwhile China, whose share in the benchmark has been steadily declining since 2020, brought its three-year streak of losses to an end with a 17 per cent net return.