How China is Dominating Emerging Market Funds

A decade ago, the emerging market index was dominated by Taiwan and South Korea, and China accounted for a meagre 4%. Now China makes up 26%

Germaine Share 19 October, 2016 | 11:28AM

At its May 2016 index review, MSCI completed the addition of a number of US-listed Chinese companies into its MSCI Global Investable Market Indexes. As a result, China’s weighting has increased in a number of key indexes, and its role in global portfolios has also been amplified. In addition, we believe the indexes now better represent the underlying growth drivers of the Chinese economy, which has various implications for portfolio managers and investors.

Inclusion of A-shares could raise China’s weighting in the index to almost 40%

China’s progressive financial market liberalisation has spurred numerous IPOs and the success of a number of Chinese companies, which has been reflected in their gigantic market capitalizations, such as Tencent.

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About Author

Germaine Share  is a Senior Analyst for Morningstar

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