The rotation into EM

By: Macro Strategy Team

February 9, 2026

By: Macro Strategy Team

Macro Strategy Team

The MCSI EM’s relative performance to EAFE in daily price changes since the beginning of 2025 is a tale of time periods. EM underperformed up to and beyond the announcement on “Liberation Day”. However, subsequent price action underscores the significance of the push into EM, rather than Europe and Japan, since Q3 2025. This divergence has become even more pronounced through January.

Author Bios

Macro Strategy Team

The Macro Strategy team provides cross-asset research and market intelligence across developed and emerging economies. Their expertise in FX, equities, and fixed income is complemented by proprietary indicators on investor behavior, inflation, and sentiment—turning complex data into actionable insights that help clients anticipate risks and capture opportunities.

1. Peter L. Bernstein Award for Best Article in an Institutional Investor Journal in 2013; Bernstein-Fabozzi/Jacobs-Levy Award for Outstanding Article in the Journal of Portfolio Management in 2006, 2009, 2011, 2013 (2), 2014, 2015, 2016, 2021; Graham & Dodd Scroll Award for article in the Financial Analysts Journal in 2002 and 2010. Roger F. Murray First Prize for Research Presented at the Q Group Conference in 2012, 2021, 2023. Harry M. Markowitz Award for Best Paper in the Journal of Investment Management in 2022, 2023. Doriot Award for Best Private Equity Research Paper in 2022.