T. Rowe Price Warns EM Index Tech Weight Hit 42% as Taiwan, Korea Top 50%
Updated
Updated · Fund Selector Asia · Jun 22
T. Rowe Price Warns EM Index Tech Weight Hit 42% as Taiwan, Korea Top 50%
1 articles · Updated · Fund Selector Asia · Jun 22
Summary
T. Rowe Price said emerging-market equity allocations now carry more hidden technology exposure than many multi-asset investors may realize, raising concentration and correlation risks rather than delivering broad diversification.
The shift follows a sharp rally in Taiwanese and South Korean technology and semiconductor stocks, which lifted tech to about 42% of the MSCI Emerging Markets Index from 24% at end-2024.
Taiwanese and South Korean equities now make up more than 50% of the index, up from less than 30%, while EM stocks have returned 72% over two years versus 41% for developed markets.
T. Rowe still stays overweight EM equities, arguing the same reshaping has improved exposure to structural earnings growth tied to AI infrastructure, semiconductors and digital platforms.
The firm also raised its overall equity overweight, favors the US and EM over Europe, and deepened its underweight in fixed income while cutting high-yield exposure.