A Quick Look At Leadership Trends In The Emerging Markets

So far this year, the MSCI Emerging Market index is outperforming the MSCI Developed World index by roughly 6%, using our equal-weighted sectors.  The EM energy sector is the only one underperforming, while the telecom and information technology sectors are outpacing the MSCI World index by 19% and 17% respectively.

MSCI EM Sectors Performance

After this run, many sectors are approaching the threshold of overbought, where 80% or more of stocks are above their 200-day moving average.  Interestingly, while telecom has been the best performing sector on average, it is far from extended across the board.  Only 43% (of the 46 companies) are above their 200-day moving average. Utilities, on the other hand and similar to the developed markets, are the most technically extended sector.

MSCI EM Sectors Percent Above Moving Average

MSCI DM Sectors Percent Above Moving Average