For much of the past decade, the story of global investing had a familiar shape: US megacaps led, and everything else followed. In 2025, that script was interrupted. Emerging-market equities finished the year up 33.6%, according to MSCI index data — comfortably ahead of the S&P 500’s 17.9% and the 21.6% return of the MSCI World. It was the asset class’s strongest year against developed markets since 2017.

For a platform built to give investors access to markets beyond the traditional hubs, this is more than a statistic. It is a reminder that a great deal of the world’s growth — and, in this cycle, a great deal of the world’s returns — happens outside the handful of exchanges that dominate the headlines. Below, we look at what powered the run, and, just as importantly, where the risks now lie.

33.6%
MSCI EM total return, 2025
17.9%
S&P 500 total return, 2025
~21%
Consensus EM earnings growth expected in 2026

What drove the outperformance

No single factor explains a move this broad. Instead, several tailwinds arrived at once — a combination that is worth understanding, because it also tells you what would need to persist for the trend to continue.

  • A softer US dollar. When the dollar weakens, capital tends to rotate toward emerging markets, and local returns translate more favourably for global investors. EM currencies strengthened notably through 2025, amplifying equity gains.
  • Light positioning. After years of underweighting the asset class, many global investors held relatively little EM exposure. As sentiment turned, even modest inflows had an outsized effect on prices.
  • Faster earnings growth. Corporate earnings in emerging markets are expected to grow more quickly than in developed markets — consensus estimates point to roughly 21% EM earnings growth, ahead of the US and other developed regions.
  • The AI cycle, spreading outward. The artificial-intelligence investment boom is no longer purely a US phenomenon. Its benefits have begun reaching economies such as India, Saudi Arabia, and the UAE, where governments are actively investing in AI infrastructure.

What makes this mix notable is that it is not built on a single fragile catalyst. A weaker dollar, cheap starting valuations, and stronger earnings are the kind of durable, fundamental drivers that can support a multi-year re-rating rather than a brief spike.

A great deal of the world’s growth happens outside the handful of exchanges that dominate the headlines.

The access lens

For an investor in a developing economy, there is a particular irony worth naming: the markets that outperformed in 2025 are often the very ones closest to home, yet historically the hardest to invest in professionally. Access has been the missing piece — not opportunity.

That is the gap platforms like Dostor exist to close. When a global-quality, regulated route into these markets becomes available, the investor gains exposure not only to distant developed markets but to the growth stories they may understand better than anyone: their own region’s champions, sectors, and structural trends. Diversification, in that framing, is not about reaching far away — it is about being able to hold the full breadth of the world’s opportunities, including the ones nearby.

The case for caution

A strong year is not a promise of the next one, and honesty about risk is part of investing well. Three cautions stand out as 2026 unfolds.

  • Concentration. Both developed and emerging-market gains have leaned heavily on a narrow set of companies tied to AI spending. Narrow leadership means that if those names stumble, the index feels it disproportionately.
  • Valuations. After a powerful run, parts of the market are no longer cheap. Rich starting valuations leave less room for error and can amplify pullbacks.
  • Geopolitics. Emerging markets remain sensitive to regional tensions, trade policy, and currency swings — sources of volatility that can arrive quickly and without much warning.

None of this argues against emerging-market exposure. It argues for holding it the way any serious investor holds any asset class: as one considered part of a diversified, long-horizon portfolio, sized to a risk level you can live with through the inevitable rough patches.

Looking ahead

Emerging markets entered 2026 with momentum intact, rising in the early part of the year, and with the structural case — a softer dollar, an earnings catch-up, and the widening reach of the AI cycle — still broadly in place. Whether the outperformance persists will depend on how those forces evolve, and no one can promise they will.

What we can say is this: 2025 was a useful reminder that the centre of gravity in global markets is less fixed than it sometimes appears. For investors who have spent years locked out of these markets, the more important shift may not be any single year’s return, but the fact that access itself is finally within reach.