MXEF Security Research Hub

The outlook for the MSCI Emerging Markets Index (MXEF) is characterized by robust earnings growth potential despite significant index concentration and geopolitical headwinds. Leadership in artificial intelligence remains a primary driver, with key semiconductor firms like TSMC, Samsung, and SK Hynix now comprising 25% of the index, contributing to a projected 58% earnings growth for 2026. Institutional targets for the MSCI EM are set at 1,820 for December 2026, with research favoring North Asian markets and select Southeast Asian countries like Indonesia and Malaysia. However, India has faced a retreat in sentiment, reaching a 14-year low in foreign ownership due to a 55% valuation premium and currency pressures. Conversely, Brazil has been downgraded to neutral amid rising fiscal concerns and political uncertainty. Overall, while global energy disruptions and high interest rates present risks, the emerging market landscape shows resilience, particularly as AI-related themes bolster the 12-month equity outlook.