Sector and Factor Evolution in Emerging Markets
Video
November 17, 2020
Shuo Xu Sector composition of the MSCI Emerging Markets Index went through meaningful changes during the last two decades, most recently with the rise and reclassification of sectors related to the digital economy. Such trends were also reflected in the relative positioning of countries and factors. For example, South Korea maintained a leading position in the consumer-discretionary sector for years until South Africa recently caught up. In addition, the consumer-discretionary sector went through significant shifts in factor exposures: With the sector reclassification in September 2018, that sector saw reversion to the growth factor (from negative to positive active exposure), as well as a significant drop in active exposure to the value and yield factors between 2018 and 2019. How to interact with this plot: Click on a pictogram to select a sector and view its historical weight in the MSCI Emerging Markets Index. Hover over the left graph to select a year and see the country weights within the sector and the active MSCI FaCS™> exposure.
Loading chart...
Please wait.
MSCI FaCS provides a framework to measure portfolio exposure to eight factor groups (i.e., value, size, momentum, volatility, quality, yield, growth and liquidity). All the weights and active exposures are calculated as of the end of June in each year. Active FaCS exposures are calculated as the sector FaCS exposures over the MSCI EM FaCS exposures at the time point.
The Future of Emerging Markets
For the past 30 years, emerging markets have provided return enhancement and risk diversification opportunities for global equity investors
The Rise of Emerging Markets and Asia
Performance leadership has rotated significantly within emerging markets (EM) during the past two decades
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.