Author: Steve Holden

Global Emerging Markets

March 26th 2026

Executive Summary

Active GEM portfolios are becoming increasingly concentrated in a narrow set of high-conviction names, with limited breadth beyond the top tier. While the overall universe remains large (~3,900 stocks), ownership is highly skewed, with the majority of names held by only a small fraction of funds and at low weights.
Capital has continued to migrate toward the most widely owned stocks, with the >70% ownership cohort reaching record weight levels, driven primarily by TSMC and Samsung. At the same time, the mid-ownership segment (30–70%)—historically the core of portfolios—has seen its relevance decline, with weights falling to cycle lows despite stable breadth.Importantly, positioning at the top end is becoming self-reinforcing. As ownership broadens, the cost of not holding these names increases, encouraging further inflows and reinforcing their dominance in portfolios.
Further down the spectrum, the 15–30% and 0–15% cohorts remain broad but low conviction, though select names are emerging where strong position sizing suggests potential for future adoption.
Overall, positioning is increasingly barbelled: concentrated at the top, fragmented at the bottom, and thinning in the middle.

How Many Companies Do Active GEM Investors Own?
The total number of companies held by active GEM funds was broadly stable at 2,500–3,000 through 2008–2013, before rising to ~4,000 following the introduction of a large quant-style strategy. Since then, it has remained within a relatively tight range. Today, 353 funds hold 3,889 companies.

By region, China & Hong Kong accounts for the largest share (1,112 companies), followed by India (544) and ASEAN (428). Together, these three regions represent 53.6% of all holdings. Exposure to MENA has increased, while the number of companies held in ASEAN and EMEA ex-MENA has declined.

Ownership Breadth
Ownership breadth is highly skewed. The majority of stocks are held by only a small fraction of funds, with 3,187 names owned by fewer than 5% of investors each. Beyond this, the number of stocks declines rapidly as ownership broadens, indicating that only a limited subset of companies is widely held.

Importantly, these low-ownership names also carry relatively small weights. Stocks held by fewer funds tend to be held at lower average positions, while higher-ownership buckets are associated with larger weights. This reinforces the concentration of capital in a narrow group of widely held names, with the long tail of stocks remaining both under-owned and low conviction.

Concentration on the Rise
Over time, capital has become increasingly concentrated in the most widely held names. Stocks owned by more than 70% of funds have seen a steady increase in their share of average portfolio weight. In contrast, stocks held by fewer than 15% of funds have continued to lose weight, reinforcing the lack of depth in the long tail. Weights in the mid-ownership buckets (30–70%) have also trended lower, suggesting a hollowing out of positioning between high-conviction crowded names and the under-owned universe.

Stocks held by more than 70% of funds

The number of stocks reaching such a broad ownership base remains very limited. Since 2008, only 10 companies have ever been held by more than 70% of funds at any one time, with the count never exceeding four in any month prior to 2025.

Today, that number has increased to six, with TSMC, Samsung Electronics, SK Hynix, Tencent, Alibaba and HDFC Bank also carrying record combined weights. This points to a growing reliance on a very small group of widely held stocks.

Ownership Trends within the 70% Club
All six names have steadily moved into the 70% club, signaling increasingly crowded and consensus positioning across funds.

However, positioning strength is not evenly distributed. The rise in portfolio concentration has been driven primarily by TSMC and Samsung, where average weights have moved meaningfully higher—elevating both to almost ‘must own’ holdings.

In contrast, the rest of the cohort has seen ownership catch up, but weights remain comparatively muted, indicating broader participation without the same level of conviction.

The 30% – 70% Cohort

Hollowing Out – Is the middle losing its relevence?
The 30–70% ownership bucket is a far less exlusive club, with ~180 companies reaching the milestone at some point since 2008. But despite this breadth, its portfolio relevance has been steadily eroding.

Historically, this cohort represented a meaningful share of fund allocations—the “core middle” of portfolios. Today, that is no longer the case. Average weights have compressed to all-time lows, even as the number of names remains stable.

30–70% Cohort: Snapshot & Turnover Dynamics
The left chart highlights the current 36 members of the 30–70% ownership cohort, led by MediaTek and Grupo Financiero Banorte as the most widely held names in the group.

Over the period, turnover has remained active. Nine names have exited, including BYD, Bank Mandiri, and Walmart de Mexico, while six have entered, led by Goldfields, PICC Property & Casualty, and Hana Financial.

Diverging Paths Within the Middle Cohort
Ownership trends within the 30–70% bucket show some clear divergences. Record highs are evident in CATL, Delta Electronics and OTP Bank, while ownership has reversed in MercadoLibre, MediaTek and ICICI Bank.

Recoveries in Credicorp, Itaú Unibanco and Naspers are also notable.

The 15% – 30% Cohort

Broad but Lower Conviction
Containing 146 companies, this group has maintained a relatively stable share of EM portfolios over time. With a combined weight of 22.0%, the average position size is small (~0.15%), though leading names are meaningfully larger.

While China & Hong Kong accounts for the largest number of stocks, LATAM commands the highest average allocation, led by names such as Petrobras and Banco Bradesco.

Intra-Cohort Rotation
Rebalancing in and out of the group since March 2025 has been relatively balanced. Names such as Fubon Financial, SK Telecom and Cathay Financial have exited, while Hyundai Electric & Energy Systems, ASPEED Technology and Asia Vital Components have entered.

Screening for High Conviction Names in the 15% – 30% Cohort
Screening within the 15–30% bucket highlights a subset of names where position sizes are high relative to ownership breadth. Stocks plotting above the trend line on the left chart below indicate higher conviction among existing holders, despite not yet being widely owned. Standouts include SK Square, Hyundai Motor, ASPEED Technology, Chroma ATE and Elite Material, all of which exhibit elevated average weights for their level of fund penetration. Names such as AngloGold Ashanti and Group Mexico S.A.B also screen positively on this basis.

The chart on the right reinforces this dynamic, showing large individual fund positions in many of these stocks—particularly SK Square, Hyundai Motor and Chroma ATE—suggesting strong underlying conviction.

Together, these names represent potential candidates for broader adoption, where high conviction among a smaller holder base could translate into increasing ownership over time.

The 0% – 15% Cohort

The Long Tail
The 0–15% ownership cohort represents the long tail of EM portfolios, with over 1,000 names in China & Hong Kong alone and broad representation across all regions.  Despite this scale, position sizes are minimal, with low average weights across the board, reflecting limited conviction and fragmented ownership.

The most widely held names in the group—such as Harmony Gold, Wipro and Hindustan Unilever—sit at the upper end of the range but remain small, non-core positions within portfolios.

Rotation within the group
Within the 0–15% cohort, a handful of names are seeing notable shifts in ownership at the margin. On the upside, Valterra Platinum, JD Health and LG Uplus stand out with recent increases in fund participation, alongside newer additions such as Advanced Micro-Fabrication Equipment and Jentech Precision gaining traction from a low base.

On the downside, ABB India, Korean Air and Proya Cosmetics have seen sharp pullbacks in ownership, while China Feihe and Alinma Bank also show clear declines from recent peaks.

Early-Stage Conviction: Candidates for Broader Adoption
Applying the same screening framework to the 0–15% cohort highlights a subset of names with high conviction despite limited ownership breadth. Stocks in the upper portion of the chart—such as Sieyuan Electric, Airtel Africa, KEI Industries and Techtronic Industries—are held with elevated weights by existing investors, suggesting stronger underlying conviction.

The chart on the right reinforces this, showing large individual fund positions in many of these names, including Kiwoom Securities, Hypera and Samsung Electro-Mechanics.  Together, these stocks represent early-stage ideas, where strong conviction among a smaller holder base could translate into broader adoption over time.

Conclusion

The evolution of GEM positioning points to a clear structural shift in how portfolios are constructed.

Funds are allocating more capital to a small group of crowded, high-conviction names, while reducing exposure to the traditional “core middle” of portfolios. This hollowing out leaves a more top-heavy structure, increasing sensitivity to a narrow set of stocks.

Importantly, within the >70% ownership cohort, positioning is increasingly reinforced by benchmark and career risk considerations. As these names become near-universal holdings, the cost of not owning them rises, encouraging further capital concentration and creating a self-reinforcing dynamic.

At the same time, the lower-ownership cohorts highlight a pipeline of potential future leaders, where high conviction among a smaller set of investors may drive broader adoption over time.

Global Emerging Markets

February 25th 2026

Executive Summary

MENA’s role in active EM portfolios has entered a new phase. The region is no longer a niche allocation, yet it remains one of the largest structural underweights in the asset class — a gap driven less by active underweighting and more by incomplete adoption.

Participation has risen sharply since the 2019 index inclusions, but the pace of capital allocation is now slowing. Ownership is at a record highs in historical terms, yet penetration remains incomplete, with nearly one-quarter of funds still holding no exposurem and with meaningful dispersion between a small group of high-conviction allocators and a long tail of low-weight positions.

Beneath the aggregate numbers, capital is becoming increasingly concentrated. Ownership gains are being driven by a narrow set of countries and an even narrower group of stocks that are rapidly moving into the core EM universe, while large parts of the opportunity set remain early in their institutional adoption cycle. At the same time, the first signs of internal rotation are emerging as managers recycle capital between regional leaders and new entrants.

This report examines:

• why the MENA underweight persists despite record participation
• where conviction is actually building at the fund and country level
• which companies are becoming core EM holdings

  Keep scrolling for our extended commentary, or click on the PDF link above for the full Market Intelligence Report for the MENA region.

Regional Positioning
The MENA region is currently the fifth-largest sub-regional allocation among active EM managers, with an average weight of 2.84% (Chart 1), well below the EM index weight of 5.66%. This makes MENA the second-largest regional underweight after the EM “Big Four” — China, India, Taiwan and South Korea (Chart 4).

Unlike the structural underweight to the Big Four, the MENA gap is largely driven by non-participation: 23.6% of funds in our analysis hold zero exposure (Chart 2). These zero allocations are a key reason why aggregate MENA positioning remains materially below benchmark.

Time-Series Analysis
The progression of MENA ownership among GEM funds is shown in the charts below. It reflects a steady rise in exposure, particularly following the major index inclusions in 2019.  Chart 8 shows the percentage of funds invested in MENA increasing from 47% in early 2021 to 76.4% today, alongside a corresponding rise in average fund weights (Chart 7).

That said, momentum has clearly stalled. Chart 10 shows the decline in MENA’s index weight, driven by relative underperformance, which has slowed the pace of allocation growth. Despite this, active managers have continued to add exposure through the drawdown. The net result is a narrowing aggregate underweight (Chart 13), now at its smallest level since July 2019.

Fund-Level Positioning
The histogram of fund weights in the MENA region highlights how concentrated positioning remains at the low end of the spectrum (Chart 31). The most common allocation band is 0–1%, which includes funds with zero exposure and reinforces how recently the region has moved into mainstream portfolios.

Even among invested managers, allocations are generally modest – 92% of funds hold less than 6% and the upper quartile of allocations sits at just 4.27%. In other words, even the more committed managers are typically running mid-single-digit exposure rather than benchmark-level weights.

That said, there is a meaningful long tail to the upside. A smaller cohort of high-conviction allocators is positioned north of 10%, with some funds allocating more than 20%. This dispersion underlines that while MENA is broadly owned, it is not yet broadly embraced at scale — conviction remains concentrated in a limited group of managers.

Country Positioning
At the country level, MENA investment growth has been driven almost entirely by Saudi Arabia and the United Arab Emirates. Both markets have seen sustained increases in ownership since early 2020, with participation rising broadly in tandem over the subsequent years. While momentum has eased recently, the UAE overtook Saudi Arabia in outright ownership at the end of 2024 and remains ahead today, held by 63.8% of funds versus 57.9% for Saudi.

Elsewhere, adoption has been far more limited. Qatar has seen a gradual decline in ownership since 2022, while Kuwait has largely flatlined as capital has concentrated in the larger, more liquid Saudi and UAE markets. Egypt is now held by a shrinking cohort of EM strategies.

Stock Positioning
As the market matures and investment levels increase, a clear hierarchy is emerging. A small group of regional leaders has established itself, while a broader second tier is beginning to gain traction.  The top four stocks by ownership now stand out as the regional anchors, led by Emaar Properties, which is owned by 38% of EM managers and ranks among the 30 most widely held stocks globally.

Emaar Properties and Aldar Properties are also the two largest aggregate overweight positions. In contrast, the majority of the MENA universe is held below index weight. The most notable underweights include Saudi Aramco, Al Rajhi Bank and Kuwait Finance House.

Stock Rotation
Stock-level activity over the past six months shows managers actively recalibrating exposure as opportunities within the region evolve. On the positive side, a net 2.8% of funds initiated positions in Etihad Etisalat, while 2.25% opened new holdings in both Salik Company and Abu Dhabi National Oil Company.

Conversely, Talabat Holding saw net closures from 3.4% of funds in our universe, with 3.1% closing positions in both Elinma Bank and Elm Company. From a flow perspective, the superior liquidity of Al Rajhi Bank and Saudi National Bank is evident in both net and gross fund flow metrics.

Stock Ownership Evolution
The charts below show the time series of the percentage of funds invested in each of the 18 most widely owned MENA companies. Charts 114–116 illustrate how aggressively ownership has risen in the leading names, all of which are now at record levels of fund participation.

Beyond the top nine, positioning has been more selective. After earlier periods of accumulation, several stocks have seen consolidation. Saudi Aramco, for example, has experienced net closures, alongside Saudi British Bank and Saudi Telecom, as managers rotate capital elsewhere within the region and broader EM universe.

Stocks to Watch
Chart 120 highlights the three companies seeing the largest increases in ownership over the past six months. Salik Company and Abu Dhabi National Oil Company remain in the early stages of their ownership journey, while Etihad Etisalat continues to push to new highs, moving firmly into the top tier of regional holdings.

Chart 121 illustrates how quickly capital can rotate when more compelling opportunities emerge. Talabat Holding, Alinma Bank and Elm Company have all seen ownership reverse following earlier periods of adoption.

Chart 122 identifies companies at record ownership levels but still held by fewer than 20% of managers. Names such as Abu Dhabi Islamic Bank and Adnoc Gas remain early in their institutional adoption cycle, yet momentum is clearly building among active EM managers.

Finally, Chart 123 highlights three Egyptian companies that were once more prominent in EM portfolios but where ownership has now drifted back toward historical lows.

Global Emerging Markets

January 30th 2026

Executive Summary

2025 was marked by a series of specific rotations within active EM portfolios, with notable positioning changes across regions, countries, sectors and stocks. At the regional level, exposure shifted away from parts of Asia toward the Americas and EMEA ex-MENA, while MENA saw rising participation despite remaining underweight. At the country level, rotation was most pronounced between South Korea and India, alongside a clear pullback from Indonesia. Sector rotation saw increased allocations to Technology and Materials, offset by reductions in the Consumer sectors, while defensive sector exposure fell to record lows. At the stock level, leadership continued to change, with selling in former consensus names and rising ownership in a smaller set of emerging or re-emerging positions.

Entering 2026, active EM positioning reflects the cumulative outcome of that rotation. Asia remains the dominant allocation but is held at a net underweight versus the benchmark, the Americas remain the clearest consensus overweight, and EMEA positioning continues to normalise towards benchmark.  Country positioning shows structural underweights in Taiwan, China & HK and India, offset by overweights in Brazil and Mexico, while South Korea’s positioning reflects a meaningful shift over the past year and Indonesia’s a clear reduction in participation. Sector exposure is anchored in Technology and Financials, which together account for around half of total allocations, with Technology underweight increasingly driven by concentration effects in TSMC.

At the stock level, TSMC remains the dominant EM holding, with record ownership and portfolio weight, yet sits at a sizeable aggregate underweight versus the benchmark as managers sell into strength. In EM ex-MENA, South Africa’s gold miners — Gold Fields and AngloGold Ashanti — have reached decade-high ownership levels, while OTP Bank continues to close the gap on Naspers as the region’s most widely held stock. In MENA, Emaar Properties has emerged as a core EM holding, now ranking among the 30 most widely owned stocks across the asset class. In ASEAN, positioning has weakened materially, driven by sustained selling in Indonesian banks — notably Bank Mandiri and Bank Rakyat Indonesia — offset only partially by recovering ownership in Sea Ltd and Grab Holdings.

As investors enter 2026, active EM positioning is characterised by established country-level over- and underweights, record-low exposure to defensive sectors, and high ownership but net underweights in the largest benchmark stocks.

Keep scrolling for the extended commentary, or click on the PDF link above for the Top Down Positioning Report, which includes the full breakdown of regional, country, sector and stock positioning among EM active funds.

Regional Positioning
Active GEM funds begin the year with a familiar and pronounced Asia bias, with average allocations of 73.7%, compared to 12.2% for the Americas and 11.5% for EMEA (chart 7). That headline exposure masks a clear effort by active managers to moderate Asia risk, with the peer group running a persistent underweight versus the MSCI EM Index, currently at -6.7% (chart 9). In contrast, positioning in the Americas remains firmly consensus, with 83.7% of funds overweight the region at an average active overweight of 5.1%. EMEA positioning has seen a recent shift, with the aggregate underweight continuing to narrow as a growing number of managers rotate from underweight to outright overweight (chart 10).

Sub-Region Snapshot
Breaking it down a level further, EM exposure remains highly concentrated in the “Big Four” — China & HK, Taiwan, South Korea and India — which together account for 68.3% of aggregate holdings. This is followed by LATAM at 11.1% and EMEA ex-MENA at 7.0% (chart 17). Despite its growing benchmark weight, MENA remains a non-core allocation for many active managers, with just 77% of funds holding exposure, resulting in a net active underweight of -2.85%.

Active positioning at the sub-regional level shows a pronounced underweights to both the EM Big Four and MENA, funding overweights to LATAM, cash, ASEAN and selective developed market exposures (chart 20). The divergence between LATAM and MENA positioning versus the benchmark is particularly stark: 81.2% of funds are overweight LATAM, compared with just 9.8% overweight MENA (chart 21).

Sub-Region Rotation
Aggregate positioning shifted meaningfully over the course of 2025. Chart 27 highlights changes in average weights between 31/12/2024 and 31/12/2025, showing a reduction in ASEAN exposure of 1.5% and a more modest 0.36% decline in MENA. These moves funded increases in the EM Big Four and EMEA ex-MENA, both up 0.72%, alongside a 0.57% rise in LATAM allocations.

Looking beyond weights to more active measures, MENA emerged as a clear beneficiary of fund rotation. The sub-region saw a 3.9% increase in the proportion of funds invested (chart 28), net inflows of $2.1bn (chart 29), and a sustained excess of buyers over sellers (chart 32). This stood in contrast to ASEAN, where all measures of ownership deteriorated over the year, pointing to a clear outward rotation.

At the asset-class level, EM equities experienced an estimated $33bn of net outflows over the year, with the larger EM Big Four absorbing the greatest share of redemptions.

Country Positioning
EM active investors enter the year with a clearly defined structural setup. Positioning is characterised by sizeable underweights in Taiwan, China & HK and India, reinforced by persistent structural underweights across key MENA markets, notably Saudi Arabia, Kuwait and Qatar (chart 37). These positions are offset by overweights in cash, Brazil, Argentina and Mexico, alongside selective non-benchmark exposure to the UK and US.

South Korea, Greece and Indonesia now sit alongside Brazil and Mexico as majority-held overweight positions, while appetite for the smaller MENA markets remains extremely limited — almost no funds are willing to run overweights in both Kuwait and Qatar (chart 38). On an absolute basis, Taiwan has opened a clear positioning gap relative to South Korea and India (chart 34), while participation drops off sharply beyond the top eight countries. For example, only 66% of funds currently hold Poland and just 64% have exposure to the UAE.

Country Rotation
Country-level rotation in 2025 was dominated by a pronounced shift in average exposure between South Korea and India. Average weights to South Korea increased by 4.9% over the year, while India saw a 3.6% decline. While relative performance clearly played a role, there was also an active component: India experienced the largest country-level fund outflows (chart 62), while South Korea recorded the strongest shift from underweight to overweight positioning across the peer group (chart 64).

Beyond this headline rotation, several smaller EM markets saw notable increases in active participation. Hungary, Greece and Poland all recorded strong rises in outright ownership (chart 61), while the UAE saw gains across multiple ownership metrics. By contrast, Indonesia experienced meaningful outward rotation, with 7.6% of funds exiting positions entirely and a further 17.1% shifting to underweight – driving average weights lower and softening the long-standing consensus overweight.

Big Four Long-Term Dynamics
China & HK, Taiwan, South Korea and India remain at the core of EM allocations, but relative positioning within the group continues to shift.

• China’s dominance has continued to fade, with average weights declining from a peak of 37.5% in late 2020 to 24.7% today (chart 40). Despite this reduction, positioning is not uniformly bearish: China & HK is no longer a clear consensus underweight, with 38.5% of funds now positioned ahead of the benchmark (chart 43)
• South Korea has moved decisively higher. Average weights have recovered from the lows and overtaken India (chart 40), positioning has shifted from underweight to roughly neutral versus the benchmark (chart 42), and the proportion of funds overweight has broken out to a new high of 59.3% — this is unchartered territory and reflects a new wave of bullishness among active investors.
• Taiwan has emerged as the largest underweight within the quartet, displacing China, with just 18.8% of funds positioned ahead of the benchmark. As we will see, this skew is largely attributable to a single stock.
• India now represents the smallest allocation among the Big Four. While sentiment has shifted meaningfully over the past two years, the current net underweight of -2.1% shows signs of stabilisation, even as positioning continues to imply expectations of relative underperformance into 2026.

Sector Positioning
Information Technology and Financials remain the two largest sector exposures, together accounting for close to 50% of total allocations. Consumer Discretionary, Communication Services and Industrials play supporting roles, contributing a further 29.7% (chart 67). All sectors, with the exception of Real Estate, Energy and Utilities, are held by more than 90% of funds.

Relative to the iShares MSCI EM ETF, active funds are underweight both Materials and Energy (chart 70), with only 20% of funds overweight Materials and 16% overweight Energy (chart 71). Technology spent 2025 as a net underweight across active EM funds, while Industrials and the Consumer sectors are positioned at mild overweights. Cash holdings stand at 2.26% and may prove a headwind should EM deliver another year of strong returns.

Sector Rotation in 2025.
There were large shifts in sector exposures across four key sectors in 2025. Allocations to Technology increased by 3.1% and Materials by 1.5% (chart 85), offset by reductions in Consumer Discretionary (-2.3%) and Consumer Staples (-1.7%). Active ownership metrics across both consumer sectors saw significant decline over the year.

Real Estate gained new exposure, with an additional 3.4% of active EM funds initiating positions, while Utilities saw a reduction of 3.9% of funds and Energy 2.8% (chart 86). A change in Financials sentiment was notable, with managers moving from a net underweight to overweight, driven by 13.8% of funds closing their underweight positions (chart 89).

Defensive Sectors – Long-Term Trends
Positioning in the three defensive sectors—Consumer Staples, Health Care and Utilities—remains clearly out of favour. Exposure to both Consumer Staples and Utilities sits at record lows of 4.58% and 1.26% respectively, while Health Care saw further declines in 2025 and continues to struggle to attract meaningful allocations across funds (chart 77).

While this is consistent with a period of strong EM performance, it is notable that aggregate exposure to defensive sectors has never been lower.

Stock Positioning
TSMC’s dominance remains firmly intact, with an average portfolio weight of 9.4%, well ahead of the next tier of Tencent, Samsung Electronics and Alibaba Group Holding. Alongside SK Hynix and HDFC Bank, these six stocks are each owned by more than 70% of funds in the analysis. A further six companies are held by more than half of funds, led by MediaTek and Banorte.

TSMC also heads the list of underweights relative to the benchmark, lagging index weights by an average of 2.45%. Tencent and Alibaba are likewise held as marginal underweights across the asset class. These positions are offset by overweights in stocks such as MercadoLibre, Contemporary Amperex Technology and AIA Group.

Stock Rotation in 2025
There were several significant shifts in stock-level ownership in 2025, led by sharp increases in fund participation in Xiaomi Corp, CATL and Accton Technology Corp. These three stocks sit at the head of a group of nine names that saw more than 10% of the 356 funds in the analysis initiate new positions during the year (chart 97).

By contrast, Meituan experienced the largest reduction in ownership, with 18.5% of funds exiting positions. This was followed by sizeable position closures in Bank Mandiri, JD.com and Bank Rakyat (chart 98).

TSMC – Selling in to Strength
Two metrics stand out when plotting TSMC exposure across active EM funds. First is the rise to record highs in both ownership and portfolio weight (Exhibits 1 and 2), with a 9.41% average allocation held by 92.7% of managers, marking the peak for both measures. Second is the sharp widening of the net underweight, as managers increasingly sell into strength to remain within positioning limits, whether self-imposed or mandate-driven.

Just over 20% of managers are positioned overweight TSMC, while the asset class as a whole remains underweight by an average of 2.45% relative to the MSCI EM index. Against this backdrop, returns broadly in line with the index would likely be the preferred outcome for many managers in 2026.

EM Big Four – Stock Trends
We highlight a group of 14 stocks that stand out across China, Taiwan, India and South Korea. Chart 107 shows the three stocks with the largest increases in ownership during 2025, with both CATL and Accton ending the year at all-time highs.  Chart 108 highlights the largest reductions. Chart 109 identifies emerging companies in the region that sit at the upper end of their historical ownership ranges but are still held by fewer than 20% of managers. Could stocks such as Asia Vital Components and Bharat Electronics compound growth in the year ahead?

Finally, former mainstays of EM portfolios—CNOOC, HTC Corp and POSCO—have fallen from historically high ownership levels to near-zero representation (chart 110). Whether POSCO can re-emerge alongside a broader recovery in South Korean equities remains an open question.

EM Ex-MENA – Stock Trends
South Africa’s major gold miners, Gold Fields and AngloGold Ashanti, have surged to decade-high ownership levels, underscoring a powerful swing back toward precious metals within EM portfolios. Even so, both still trail OTP Bank, which is rapidly closing the gap on Naspers as the most widely held stock in the region (chart 118)

At the other end of the spectrum, Żabka Group and Alpha Services stand out as lightly owned names exhibiting clear positive momentum, suggesting early-stage accumulation by active managers (chart 120). In contrast, Koç Holding and Aspen Pharmacare have fallen to new ownership lows (chart 119).

Chart 121 highlights the three stocks with the largest declines in peer ownership since 2008. While Sasol and Garanti Bank continue to grind lower, MTN Group has staged a notable recovery in ownership—raising the question of whether it can continue to close the gap back toward prior peaks into 2026.

LATAM – Stock Trends
The largest positive ownership gains across LATAM in 2025 came from outside the traditional top tier of regional holdings. Reda DOR features prominently in both Charts 129 and 131, highlighting a combination of record-high ownership levels, strong positive momentum, and—critically—continued under-ownership across the broader EM universe. This profile positions it as a clear non-consensus winner within the region.

In contrast, several established LATAM names struggled into 2026. WEG S.A. and Walmart de México, alongside Globant, saw pronounced declines in EM fund ownership (Chart 130). These companies underscore the shifting nature of capital allocation within LATAM, as leadership rotates away from long-standing consensus holdings. The capitulation has been most extreme in Grupo Televisa and Usinas de Minas Gerais, both of which have been almost entirely exited by active EM investors.

ASEAN – Stock Trends
Two dominant themes emerge from our ASEAN stock analysis. The first is the recovery in ownership of Sea Limited, which peaked at over 30% of EM funds in 2021 before collapsing to just 10% by 2023. Ownership has since rebounded sharply, signalling renewed investor willingness to re-engage with ASEAN consumer internet stocks.

Importantly, this re-engagement is no longer confined to a single name. Grab Holdings is also emerging as a rising ownership story, highlighted in Chart 142, suggesting that improving sentiment is beginning to broaden across the region’s digital leaders rather than remaining a one-stock recovery.

Offsetting this, the second theme is the aggressive unwind in Indonesian banks, which has driven much of the rotation out of Indonesia at the country level. Bank Mandiri and Bank Rakyat Indonesia have borne the brunt of the selling, marking a clear shift away from what had been core, consensus exposures.

MENA – Stock Trends
The charts below track the evolution of fund ownership across the 18 most widely held companies in the MENA region. At a glance, they convey a clear message on both momentum and engagement: all of the top nine names are now at record ownership levels. MENA is rapidly establishing itself as a source of core positions within EM portfolios, with Emaar Properties having recently entered the top 30 most widely held stocks across the global EM universe.

While there have been periodic pauses along the way, these have been the exception rather than the rule. Saudi Aramco, for example, remains well below its prior ownership peak, and Qatar National Bank is consolidating after the sharp surge in ownership seen during 2021–2022. Even so, these instances stand out against an otherwise broad-based and sustained increase in investor engagement with the region.

Global Emerging Markets

Active GEM Funds: Performance & Attribution 2025

January 7th 2026

Executive Summary

• Strong Year for Active EM: Active GEM funds returned 32.2% in 2025, their second-best in 15 years, with nearly half outperforming the benchmark.

• Style & Regional Leaders: GARP and Value strategies led performance, boosted by South Korea-heavy positioning and tech exposure.

• Tech and North Asia Dominated: Technology alone added 13.2%, while Taiwan, South Korea, and China/HK contributed 70% of total returns.

• Concentrated Stock Impact: Just 10 stocks — including TSMC, SK Hynix, and Samsung — drove half the year’s gains.

• Attribution Wins & Losses: Outperformance came from underweights in Saudi and India and strong stock selection in Taiwan and Korea; cash drag and poor selection in China/South Africa weighed.

• Passive Still Average: The MSCI EM ETF again landed near the 50th percentile, continuing a long-term trend of middling returns versus active peers.

A Strong Year for Emerging Markets

Active GEM funds enjoyed one of their strongest years in over a decade, delivering an impressive average return of 32.2% in 2025 — their second-best annual performance in the last 15 years. Despite falling just short of the iShares MSCI EM ETF, nearly half of active managers managed to outperform the benchmark.

The top of the performance table was dominated by South Korea-heavy strategies, with Macquarie and a cluster of Value and GARP-oriented funds leading the charge. GARP strategies emerged as the best-performing style group, posting average returns of 37.8%, followed closely by Value funds at 36.5%. In contrast, Aggressive Growth funds lagged well behind, averaging just 25.97%, while Small and Midcap strategies also underperformed.  With an 83% gap between the best and worst performer, it once again highlights the breadth and diversity of the EM active universe.

Asian Technology Drives Returns

The charts below break down the components of the 32% average return for active GEM funds in 2025, using a portfolio based on managers’ aggregate holdings. At the sector level, Technology was by far the largest contributor, adding 13.2% to returns. Financials followed at 7.6%, with Communication Services, Consumer Discretionary, Industrials, and Materials each contributing between 2.5% and 3%.

From a country perspective, Taiwan, South Korea, and China & Hong Kong were the dominant drivers, together contributing 23.5% — around 70% of total returns. Leading country-sector combinations included South Korea and Taiwan Technology. On the downside, a handful of areas pulled returns lower, with India Tech, Argentina Tech, and Indonesian Financials together costing just under 0.9%.

Stock Level Influence
At the stock level, just 10 names accounted for half of the year’s returns — led by TSMC, SK Hynix, and Samsung Electronics. Standout gains from select South Korean stocks, including SK Hynix and SK Square, were major contributors, as were gold miners like Anglogold Ashanti and Gold Fields.

Losses were fewer and generally more modest. However, well-held positions in Meituan and Infosys weighed on performance, ranking among the year’s key detractors.

Performance Attribution – Where Funds Beat the Benchmark
The chart below highlights the main sources of outperformance and underperformance versus the benchmark at the country level. The biggest contributors were large underweights in Saudi Arabia and India, alongside strong stock selection in Taiwan and South Korea.

On the negative side, returns were held back by cash drag, overweights in Argentina and Indonesia, and weak stock selection in China and South Africa.

Stock Attribution
Active EM managers gained from net overweights in key outperformers such as SK Hynix and SK Square, with smaller positive contributions from Delta Electronics and ASPEED Technologies. Underweights in weaker names — including Meituan, Saudi Aramco, International Company for Water & Power, and Xiaomi — also added to relative performance.

On the negative side, a 2.5% net cash position limited upside, while underweights in TSMC and Alibaba meant managers missed out on key benchmark gains. Overweights in Globant, MakeMyTrip, and MercadoLibre also detracted from relative returns.

Long-Term Performance
This year’s mild underperformance adds to a small shortfall in 2024, yet the broader picture remains clear: over the past 22 years, active GEM funds have outperformed in 14 of them — and typically by a greater margin than in the years they’ve lagged.

Meanwhile, the iShares MSCI EM ETF has consistently delivered middling results, rarely straying far from the 50th percentile and never ranking among the top performers. For investors seeking to capture the full potential of EM, a purely passive approach has proven to be — at best — an average decision.

Performance & Attribution Report

Click the link opposite for full charts and data detailing the drivers of 2025 performance, along with a review of 3-, 5-, and 10-year results across the active EM peer group.