What countries come to mind when it comes to emerging markets? China? India?
It’s not uncommon to think of these Asian giants of the emerging world first.
These two countries have the largest populations in the world and are in the top five largest global economies. Together they make up just under half of the MSCI Emerging Markets index – the main benchmark for measuring the performance of funds investing in the region.
Regional allocation of the MSCI Emerging Markets index
As you can see though, there’s much more to emerging markets than just Asia.
In fact, there’s actually 24 countries in the index and that comes with potential to find some exciting opportunities.
So as China’s domestic economy continues to struggle and growth in India shows signs of slowing, where else can investors find opportunities in the sector?
This article isn’t personal advice. All investments, and any income from them, can fall as well as rise 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 if an investment is right for you, ask for financial advice.
Latin America
With many emerging markets investors focused on Asia, Latin America is often forgotten about. However, it’s been one of the best-performing stock markets in the first half of 2025, with the MSCI Latin America index up 19.01%*.
In the past 20 years, the region’s accounted for as much as 23% of the index, after benefiting from the commodities boom and its plentiful resources. This has since fallen to 7% due to some of its economies struggling against the rapid growth of other emerging countries like India.
The region is diverse though, with leading businesses operating across a range of sectors.
Just over a third of the MSCI Latin America index consists of financial companies.
Nu Holdings provides digital banking services to over 100 million people in Brazil, Mexico, and Colombia, while Grupo Financiero Banorte offers a variety of financial services in Mexico.
Other major companies include the Brazilian miner Vale and the Mexican subsidiary of the retailer Wal-Mart.
Geographically, the index is dominated by Brazil and Mexico, but there’s also some exposure to Chile, Peru, and Colombia.
Brazil’s economy is the largest in Latin America and the ninth biggest globally, but it has struggled recently.
To get inflation under control and stabilise Brazil’s currency, the central bank has consistently raised interest rates, which now stand at 15%.
Despite this, gross domestic product (GDP) has grown in line with expectations and is estimated to grow by up to 2.5% in 2025. With elections in the country scheduled for 2026, the current administration will be keen for this growth to continue.
Mexico has a chance to be a beneficiary of Donald Trump’s trade policies. Although the country has a trade surplus with the US, meaning it exports more than it imports, the United States-Mexico-Canada Agreement provides some protection from potential tariffs.
Because of this, it’s become a popular place for overseas companies, particularly those from China, to build manufacturing hubs. This could be a key driver of long-term growth.
Europe
Another stand-out performer in 2025 has been Emerging Europe, which consists of countries like Poland and Turkey. The index grew 24.74% in the first half of 2025.
Similar to Latin America, the importance of the region within the context of the wider emerging markets universe has fallen. But that doesn’t mean it lacks opportunities for investors.
About half of the MSCI Emerging Markets Europe index is comprised of financial companies, including regional banks in Poland, Hungary, and Greece.
Businesses in other sectors include Polish supermarket chain Dino and CEZ, a Czech energy company providing power to many countries across Eastern Europe.
Poland’s economy has been growing steadily, with GDP increasing 2.9% in 2024 and forecast to grow 3.3% in 2025.
Presidential elections in the country in June have resulted in a president and prime minister from opposing sides of the political spectrum. This could lead to instability, but there have been no signs of this in the first few weeks of the new presidential term.
Middle East and Africa
Other smaller portions of the emerging markets universe include South Africa and a number of countries in the Middle East.
This region makes up just under 10% of the broader emerging markets benchmark, with companies from Saudi Arabia, United Arab Emirates and Kuwait.
Financial companies in the Middle East are well represented, as well as many state-owned enterprises like Saudi Aramco, the world’s largest oil producer, and Saudi Telecom Co.
South African companies include the technology holding company Naspers, mining company Anglogold Ashanti and the banking firm Firstrand.
Its stock market has performed well in 2025 so far, as lower inflation and falling interest rates have created a positive economic backdrop.
Jun 20 – Jun 21 | Jun 21 – Jun 22 | Jun 22 – Jun 23 | Jun 23 – Jun 24 | Jun 24 – Jun 25 | |
|---|---|---|---|---|---|
MSCI Latin America | 29.94% | -4.06% | 24.83% | -4.54% | 5.13% |
MSCI Emerging Europe | 19.86% | -73.81% | 36.43% | 34.18% | 14.97% |
2 fund ideas to invest in emerging markets
For most investors, having broad exposure to emerging markets is a good place to start – this is a more diversified approach and actively managed funds leave the decision over how much to invest in companies from different countries to a professional.
Here are two fund ideas from our Wealth Shortlist – funds chosen by our analysts for their long-term performance potential. Be aware that investing in emerging markets increases risk and as these are specialist funds they should only make up a small part of an investment portfolio.
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.
For more details on each fund and its risks, please see the links to their factsheets and key investor information below.
JPM Emerging Markets
The JPM Emerging Markets fund invests in companies across a diverse range of emerging economies, from India and Korea to Mexico and Turkey. It aims to provide returns to investors above those of the benchmark over the long term.
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.
Leon Eidelman is the fund’s lead manager since 2016. He’s supported by co-managers Austin Forey and John Citron.
Eidelman and his team find plenty of opportunities in Latin America, where 16% of the fund is currently invested. One of the fund’s largest investments is in Grupo Financiero Banorte.
Investors should note that, of the funds under our research coverage, this is one of the most carbon intense.
iShares Emerging Markets Equity Index
The iShares Emerging Markets Equity Index fund provides low-cost diverse exposure to emerging countries, like China, Taiwan and Brazil.
The fund aims to track its benchmark, the FTSE Emerging Index, by investing in most companies in the index, rather than trying to perform better than it.
This will include some investment in smaller companies, which add risk. The fund can also use securities lending which adds risk.
An index tracker fund is one of the simplest ways to invest. This fund could be a great, low-cost starting point to invest in emerging markets in a portfolio aiming for long-term growth.
Investors should be aware that this fund has one of the highest ESG risk profiles of the funds under our research coverage. It’s also one of the most carbon intense.
Annual percentage growth
Jun 20 – Jun 21 | Jun 21 – Jun 22 | Jun 22 – Jun 23 | Jun 23 – Jun 24 | Jun 24 – Jun 25 | |
|---|---|---|---|---|---|
JPM Emerging Markets | 29.20% | -25.36% | 0.10% | 7.00% | 5.18% |
iShares Emerging Markets Equity Index | 22.18% | -10.48% | -3.49% | 12.59% | 6.75% |
MSCI Emerging Markets | 26.43% | -14.68% | -2.36% | 13.62% | 6.98% |
IA Global Emerging Markets | 28.24% | -17.14% | -0.63% | 11.75% | 5.07% |