As another year ends, it is becoming increasingly clear that the golden age of returns in the region is well behind us, at least for now.
Since 1991, global equity markets have been through pretty much everything. The dot-com crash, the financial crisis, and COVID-19 - along with an almost unparalleled rise in the swelling capitalization of big tech names most recently encapsulated by the Magnificent Seven.
But, regionally, things are looking slightly less rosy, as a Visual Capitalist analysis of market returns over the past 30 years released Wednesday indicates, something finews.asia has amply documented related to the mainland and Hong Kong this year and last.
Golden Age
The golden age of returns in the MSCI Emerging Markets Index, which includes key listed constituents in China, India, South Korea, and Taiwan, among others, was clearly between 2001 and 2010.
In that decade, the index returned 15.9 percent annually, significantly outperforming other markets. Since then, however, emerging markets have managed to eke out just 0.9 percent.
US Exceptionalism
Right now, it is clearly the heyday of the US market, as it has been the top-performing region for the last 10 years out of the past 15, although it had a few wobbles here and there as well.
Between 2002 and 2005, it was the worst region worldwide in terms of returns, a period capped off with a hefty 23 percent decline in 2002, at the cusp of the dot-com bust.
Looking at the Future
Europe, for its part, has stood in the middle ground between both regions, having less extreme movements than the emerging markets, while often underperforming the US.
The key question for the next 30 years is whether this will all continue in an age of conflict and heightened geopolitical tension, particularly between the US and China – or whether we will see another changing of the guard soon.
