China announced its economy achieved their 2025 growth target of 5%. The country also recorded a record trade surplus of $1.19tn last year. A weaker domestic currency and modest consumer demand meant import growth was lower. Exports grew, despite a trade dispute with the US.
India moved to improve its trading outlook.
Last year the US imposed 50% tariffs on the country, half of which due to continued purchasing of Russian oil. This has now been reduced to 18% after India pledged to increase US imports.
The country also finalised a comprehensive trade deal with the EU, following a similar agreement with the UK last year.
And Indonesia came under fire from MSCI.
The financial analytics company warned that a lack of data transparency in the country’s financial markets could lead to it being downgraded from emerging to frontier status, leading the country’s leadership to promise reform. The domestic stock market reacted negatively to the threat, although Indonesia only makes up a small part of the emerging markets sector.
This article isn’t personal advice. Remember, all investments and any income from them can rise and fall in value, so you could get back less than you invest. Past performance isn’t a guide to the future. If you’re not sure an investment is right for you, ask for financial advice.
How have stock markets fared?
This has been a strong period for emerging markets.
The MSCI Emerging Markets index rose 30.09%* in the 12 months to the end of January 2026. The stock market rally was broad, with companies across the style spectrum performing equally well. Technology and industrials were the strongest performing sectors, while consumer staples were weakest. In Asia, the MSCI AC Asia Pacific ex Japan index finished 25.59% higher.
Growth in Korea has been strong, with the MSCI Korea index returning 119.10% and reversing several years of losses. This was a key contributor to the performance of the emerging markets index.
President Lee made market reform a key objective of his election campaign last year with a ‘Value Up’ program, aiming to improve conditions for minority shareholders. He set a target value of 5,000 for the local Kospi index. The index was below 3,000 in June but the surge in share prices saw it reach the target in January.
SK Hynix and Samsung Electronics, companies playing a leading role in the AI boom, helped push the market to record highs. The growth in the Korean market means the country now makes up a greater proportion of the emerging markets sector than India.
There was also growth in China, with the benchmark returning 23.42%. India found itself at the other end of the performance table as the market fell 7.09% over the past 12 months. Although this comes after a period of strong stock market growth in the country.
Emerging markets outside of Asia, like South Africa and Poland, performed well. In Latin America, Mexico and Brazil also enjoyed strong returns.
Annual percentage growth
January 2021 to January 2022 | January 2022 to January 2023 | January 2023 to January 2024 | January 2024 to January 2025 | January 2025 to January 2026 | |
|---|---|---|---|---|---|
MSCI Emerging Markets | -4.76% | -3.80% | -5.79% | 18.22% | 30.09% |
MSCI AC Asia Pacific ex Japan | -7.60% | 2.11% | -8.75% | 20.73% | 25.59% |
MSCI Korea | -16.44% | -3.14% | -4.31% | -6.92% | 119.10% |
MSCI China | -27.50% | -1.84% | -31.22% | 38.52% | 23.42% |
MSCI India | 30.91% | -0.82% | 23.76% | 8.51% | -7.09% |
How have Wealth Shortlist funds performed?
Performance has varied for the Asia and emerging markets funds on the Wealth Shortlist over the past 12 months. We expect this though, as fund managers have different investment styles which bring success at different times.
Investing in funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest and make sure any new investment forms part of a long-term diversified portfolio.
If you’re looking to invest in emerging markets, a global emerging markets fund or a fund offering wide exposure to Asia could be a good option. Remember though, investing in these areas typically comes with higher levels of risk than developed markets.
For more details on each fund, its charges, and specific risks, see the links to their factsheets and key investor information.
JPM Emerging Markets
Our top performing Wealth Shortlist fund over the 12 months to January 2026 was JPM Emerging Markets, which returned 35.75%*. This beat the benchmark’s growth as well as the 27.58% gain of the IA Emerging Markets peer group.
Leon Eidelman is the fund’s lead manager since 2016. He’s supported by co-managers Austin Forey and John Citron.
The managers invest in high-quality companies they believe can sustain earnings growth over the long term. They consider the financial strength of a business, the quality of the management team, and the level of corporate governance.
Our analysis shows that investments in technology and financials companies contributed positively to the fund’s performance.
Jupiter India
Jupiter India was the weakest of our Wealth Shortlist funds over the past 12 months.
The fund lost 2.91% in this period, although this was ahead of both the MSCI India benchmark and the average fund in the IA India/Indian Subcontinent sector, which suffered greater losses. Relative to other Asian and emerging markets, India has been weaker in recent months.
Avinash Vazirani, the fund’s lead manager, has a long track record of successful investing in India and has managed this fund since launch in 2008.
His philosophy is ‘growth at a reasonable price’, where he looks for financially robust companies that generate strong cash flow and are currently priced lower than their earnings potential merits.
Alongside investing in a single emerging market, the fund can also invest in higher-risk smaller companies. Investors should note that of the funds under research coverage, Jupiter India has one of the highest ESG risk profiles, including investing in carbon intensive businesses and those involved with the extraction of fossil fuels.
These companies may face increased scrutiny from investors and regulators, potentially impacting the fund’s performance.
Annual percentage growth
January 2021 to January 2022 | January 2022 to January 2023 | January 2023 to January 2024 | January 2024 to January 2025 | January 2025 to January 2026 | |
|---|---|---|---|---|---|
JPM Emerging Markets | -18.38% | -4.22% | -8.17% | 13.00% | 35.75% |
IA Global Emerging Markets | -5.07% | -5.16% | -5.07% | 14.68% | 27.58% |
Jupiter India | 38.09% | 2.36% | 48.49% | 8.12% | -2.91% |
IA India/Indian Subcontinent | 29.32% | -3.01% | 23.61% | 9.03% | -11.58% |