The MSCI Emerging Markets index is created by Morgan Stanley Capital International (MSCI) designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index that consists of indices in 23 emerging economies 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 United Arab Emirates.
Initiated in 1988, the MSCI Emerging Markets Index (MSCI EMI) represented 10 nations with a total world market capitalization of less than 1%. In 2016, the index has since grown to incorporate 23 countries that comprise about 10% of global market cap. Hence, the MSCI EMI is appropriately used as a benchmark for performance by many emerging market growth mutual funds.
The iShares MSCI Emerging Markets ETF seeks to track the investment results of MSCI Emerging Markets Index. This ETF does not include any currency hedging. This means investors in this product gain exposure to the underlying securities and the currencies in which they are denominated. It is an efficient way to take advantage of trends in the emerging markets and cyclical movements related to emerging markets local currencies.
Last week's update drew attention to the developing bearish candlestick reversal pattern, a shooting star, usually suggests lower prices following its completion. This week's lower opening and weak closing confirms the short-term pull-back in emerging markets equities.Read More