Can outperformance continue 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…