Asia & emerging markets review – which stock markets have done best?

Uncertainty around US trade policy and implementation of tariffs continues to hang over financial markets, not least in Asia. The initial 90-day pause offered by the US has reached an end, but it doesn’t feel we’re close to firm resolutions.

Away from the trade uncertainty, central banks have lowered borrowing costs, with interest rate cuts in India, China and Malaysia all coming in the last quarter. These have come amid weaker growth outlooks in many Asian countries.

South Korea held its presidential election, with Lee Jae-Myung of the Democratic Party victorious. This followed the impeachment of Lee’s predecessor at the end of last year.

This article isn’t personal advice. If you’re not sure an investment is right for you, ask for financial 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 also isn’t a guide to the future.

Tariff questions remain

Since US President Donald Trump announced a range of global tariffs in April, countries have scrambled to secure more favourable trading terms with the US.

Asian countries, who typically export more to the US than they import, were awarded some of the highest tariff rates in the world.

Fast forward to now and, after a pause on the tariffs’ implementation to allow countries time to negotiate, the picture remains unclear.

Some countries, like Indonesia and the Philippines, have come to agreements with the US. These still include tariff rates of 19%, but are slightly lower than those initially imposed in April.

Vietnam’s tariff rate has reduced from 46% to 20%, although will see a levy of 40% on any goods ‘transshipped’ through the country. This is where a third country, typically China, exports to Vietnam before the goods are further shipped to their final destination. This is done to mask the origin of the goods and avoid potential import charges.

China and India, large trading partners of the US and important countries to emerging market investors, haven’t found success.

At the time of writing, India is faced with a tariff rate of 25% and threats of harsher penalties to come due to continued importing of Russian oil.

China has yet to come to an agreement with the US, despite multiple rounds of talks, with a further tariff pause looking likely.

Some concessions have been made, with the US allowing more technology exports to China in exchange for easing restrictions on their exports of ‘rare earth’ materials. These are elements of critical importance to many manufacturing industries and is an area where China dominates mining and processing.

Elsewhere, Brazil is facing the highest tariff rate globally at 50%. Despite running a trade deficit with the US, non-trade factors are driving this with the US attempting to stop what they see as a politically-motivated prosecution of Brazil’s former president.

How have stock markets fared?

Despite the ongoing trade uncertainty, markets in Asia and emerging countries have mostly enjoyed a positive time recently.

Over the 12 months to July 2025, the MSCI Emerging Markets index rose 14.41%* while MSCI AC Asia Pacific ex Japan finished 15.29% higher.

Businesses in the financials and technology sectors have performed particularly well in the past year, while energy companies have struggled.

China has been one of the strongest markets, with the MSCI China index rising 38.16% in the period.

The Chinese government are continuing to provide stimulus with the aim of boosting the domestic economy, following a prolonged decrease in consumer confidence brought on by troubles in the housing market.

South Africa and Poland have also seen strong growth, with the benchmarks gaining 23.38% and 33.29% respectively.

MSCI Korea finished the last 12 months 8.23% higher. The country has experienced a turn in fortunes in recent months as investors find positive signs in the new president’s plans for market reform.

At the other end of the performance table, the Indian stock market fell 9.33% in the past 12 months. Some investors withdrew from the market following a period of strong performance and concerns over high valuations across the market.

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.

This is expected though as fund managers have different investment styles and areas of focus.

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 fund that offers wide exposure to Asia or a global emerging markets fund could be a good option. Just remember, investing in these areas typically comes with higher levels of risk than more established markets.

For more details on each fund and its risks including charges, see the links to their factsheets and key investor information below.

FSSA Greater China Growth

Stewart Investors Indian Subcontinent All Cap