EM Indexes Concentrate 26.7% in 3 AI Chip Stocks as Rally Tops Past Peaks
Updated
Updated · Morningstar · Aug 21
EM Indexes Concentrate 26.7% in 3 AI Chip Stocks as Rally Tops Past Peaks
3 articles · Updated · Morningstar · Aug 21
Summary
Three stocks—TSMC, Samsung Electronics and SK Hynix—now make up 26.7% of Morningstar’s emerging-markets benchmark, leaving EM investors increasingly exposed to a narrow AI semiconductor trade.
Those names drove about 57% of the index’s 30.3% gain over the past year, then accounted for a similar share of its 6.8% loss after Samsung and SK Hynix fell sharply from late June.
The concentration is more extreme than earlier EM booms: the top 10 stocks in MSCI’s EM index reached 39% in early June 2026, versus 28% during the 2020-21 China tech surge.
Past concentration episodes were followed by steep selloffs—Neuberger Berman cited a 35% decline after the 2014-15 cycle—prompting some managers to trim big AI holdings and hunt in cheaper areas such as China financials, ASEAN small caps and Brazil mining.