Emerging market (EM) equities delivered strong returns in September, reaching new highs for the year. The MSCI Emerging Markets Index rose 7.1%, outpacing developed market equities, which edged up by 3.2%. The rally was driven by firm commodity prices and a weaker US dollar, which encouraged risk-taking among investors. China led the upswing, while South Africa and Brazil also outperformed on the back of their commodity exposure and currency strength.

Emerging market equities delivered another positive month, albeit underperforming relative to developed market peers. Trade tensions once again dominated the headlines with Washington’s “reciprocal tariffs” leaving many trading partners facing higher tariffs while others secured temporary truces to keep negotiations going. The MSCI Emerging Markets index was up by a modest 1.3%, largely driven by strong performance from China and the Latin America region, while the MSCI World Index gained a stronger 2.6%.

Global markets ended July on a positive note, with the MSCI World index up by 1.3%. Emerging markets (EM) continued to outperform their developed market (DM) peers, as the MSCI Emerging Markets index gained 2.0% for the month. Performance was lifted by the ongoing artificial intelligence (AI) boom, although lingering tariff risks and US dollar strength provided headwinds for EM equities. 

Emerging market (EM) equities posted strong gains over the month, delivering a 6.0% return, outperforming relative to developed market (DM) peers. Performance was supported by easing geopolitical tensions and trade negotiations, which improved investor sentiment across global markets. For the year to date, the MSCI Emerging Markets Equity Index is up 15.3% while the MSCI World Equity index delivered a total return of 9.5%, highlighting EM’s relative strength.  

The US-China standoff remained a dominant theme in May. However, green shoots emerged as Presidents Trump and Xi agreed to a significant rollback of reciprocal tariffs.  Emerging market equities saw gains over the month, albeit underperforming relative to developed market equities. South Africa and Mexico led within emerging markets while Taiwan, Hong Kong, Indonesia and Korea were notable contributors. The MSCI Emerging Markets Equity Index ended the month 4.3% higher, while the MSCI World experienced a 5.9% uptick.

Global equities came under pressure in April as U.S. President Trump surprised the markets with much larger than expected tariffs against virtually every trading partner in the world. On 2 April, during a ceremony in the White House Rose Garden, he introduced what he called a “reciprocal tariff” strategy, which applies a series of tariffs on all U.S. imports based loosely on each trading partner’s goods trade deficit with the U.S.