Tech, Health Stocks Top Emerging-Market Rankings for Fourth Year

Where Should You Invest in 2016?
  • They're the past decade's most consistent outperformers
  • In the developed world, retailers and medical companies rule

In a dismal year for emerging-market stocks, information technology and health-care companies have fallen the least, positioning those sectors to become the developing world’s top two performers for the fourth year in a row.

They are the MSCI Emerging Markets Index’s most consistent outperformers. If the rankings hold -- with both down 8 percent and comfortably ahead -- each will have finished in first or second place five times in the past decade. Consumer staples trail in third place.

Emerging Markets Sector Rankings

2015 YTD201420132012201120102009200820072006
Health Care1st1st2nd1st7th4th9th1st7th10th
Info Tech2nd2nd1st2nd5th7th2nd5th10th9th
Cons. Staples3rd8th6th3rd1st2nd6th2nd8th6th
Cons. Disc.4th5th3rd6th3rd1st1st6th9th8th
Industrials5th6th4th5th10th3rd7th10th1st7th
Energy6th10th9th9th6th9th4th9th3rd2nd
Financials7th3rd8th4th8th6th5th7th6th5th
Telecom8th7th5th7th2nd8th10th4th4th4th
Utilities9th4th7th10th4th10th8th3rd5th1st
Materials10th9th10th8th9th5th3rd8th2nd3rd

In the MSCI World Index of developed markets, the top sectors this year are health care (3.8 percent) and consumer discretionary (3.3 percent) -- such as retailers, media and services companies -- with information technology third at 3.1 percent.

The developed world’s top two performers over the past decade mirror their emerging markets counterparts: In both classes, the consumer-staples and health sectors have doubled in value since the end of 2005 and are far ahead of other industries.

Some industries fare much better in the developed world than in emerging markets, and vice versa. Energy has been the worst emerging market performer over the past 10 years, falling almost three times as much as in the developed world. Financial stocks rank lowest in developed countries, but their shares are up 11 percent in emerging countries.

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