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Chart of the Week: EM’s vanishing diversification

AI concentration makes EMs look like DMs

This article is an on-site version of our Unhedged: Chart of the Week newsletter. You sign up here to get the newsletter delivered every Saturday, or explore all FT newsletters

Good morning. Historically, developed market investors have looked to emerging market stocks for diversification. In addition to providing exposure to different economies and (in some cases) lower valuations, emerging market assets provided exposure to sectors under-represented in developed world indices, such as energy and commodities. Increasingly, however, emerging market indices have fallen into the same pattern as the US market — top-heavy and tech-oriented. The MSCI EM index has surged 14 per cent this year, more than double the S&P 500’s gains, as Asian chipmakers have powered higher.  

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