The market fallout of the Iran conflict has rippled across all major asset classes, leaving few areas of safety for global investors. Analysis conducted by the research team at MSCI demonstrates how war risk is currently flowing into equity portfolios and which markets are more exposed. MSCI found that emerging Asian markets are the most vulnerable to oil-supply disruption through the strait. China, South Korea, India and Taiwan each have high dependency on Hormuz-transiting oil, and their equity markets were hardest hit of the major bourses by the news of its effective closure, the analysts said. The countries’ chunky weighting in the MSCI Emerging Markets Index – its 4 largest constituents – only amplifies portfolio-level impact for investors, wrote research director Abhishek Gupta. “EM companies generate three to four times the revenue exposure to GCC economies compared to developed-market peers, reflecting deeper trade relationships and local ties,” he added. The research also found that firms from India, the U.S., Japan and Taiwan all have economically meaningful physical presence in the GCC countries, classified as over 2%. This type of exposure wouldn’t appear in standard geographic classifications, Gupta wrote. The lesson? Geopolitical shocks don’t affect all investors equally. “The degree of impact depends on hidden linkages embedded in holdings: which companies generate revenue from affected regions, where they operate physical facilities and how vulnerable their supply chains are to disruption,” he added.