Emerging markets had a bumper year — here’s what could be in store in 2026

Emerging markets are poised to end 2025 on a high, as a flurry of positive momentum propelled their stock indexes to record highs that many expect will be extended even further in the new year.

The MSCI Emerging Markets Index — comprised of large- and mid-cap stocks listed across emerging markets countries — has surged around 30% since the beginning of the year, outperforming all three major Wall Street averages. By comparison, the MSCI World Index, which only includes large- and mid-cap equities from developed markets including the U.S., has gained just over 20% in 2025.

Certain countries in the cohort have had particularly stellar years. The Athens Composite — Greece’s benchmark index — for example, has surged nearly 44% over the course of the year, and will be upgraded to developed market status in Sept. 2026.

The rise of emerging markets this year isn’t just down to a single, or even a handful, of individual country outperformances, however. Chile and the Czech Republic’s benchmark equity indexes are both by around 50.8% year-to-date, while Romania’s BET index has gained more than 42%.

‘The year of change’

At a roundtable event in London toward the end of November, fund managers at investment management firm Ninety One – which manages assets worth more than £152 billion ($203 billion) – struck a bullish tone, suggesting more upside is likely in various pockets of emerging markets in 2026.

“If you were to summarize the year 2025 nicely in one word, it would be change — this is the year of change across multiple layers,” Varun Laijawalla, a portfolio manager in the firm’s emerging markets equities division, said. “The first level of change is there’s been one trade in the markets for the last 15 years. It’s been developed markets, which has really been the U.S., and that’s changed this year.”

Laijawalla also noted that the dollar had weakened this year after “15 years of a one-way trade.” Since the beginning of the year, the dollar index – which measures the value of the U.S. dollar against a basket of major rivals – has dipped around 9%, a move that was first catalysed by the April selloff of U.S. assets that became known as the Sell America trade.

A strong U.S. dollar can put pressure on emerging economies that rely on foreign capital, as it raises the local currency cost of dollar-denominated debt and can reduce investment inflows from abroad.