The action in Emerging Markets ETFs this year has been really interesting to watch. From record-breaking asset flows to impressive results, albeit massively dispersed, this category of funds has had quite a ride so far in 2026.
Emerging markets spent most of the last decade as the asset class everyone owned a little of and complained about a lot.
The Avantis Emerging Markets Equity ETF offers EM exposure with a broad, actively managed portfolio of 3,900+ stocks. AVEM has outperformed EEM and key multifactor competitors since 2019, with higher volatility. The ETF features significant country (China, Taiwan) and sector (Technology) concentration.
Emerging-market equities have delivered a sharp move higher over the past year, and the three largest vehicles investors use to access the asset class have each captured it differently.
Caliber Wealth Management LLC KS raised its holdings in Avantis Emerging Markets Equity ETF (NYSEARCA:AVEM) by 4.4% during the fourth quarter, according to its most recent filing with the Securities and Exchange Commission. The fund owned 222,649 shares of the company's stock after buying an additional 9,476 shares during the quarter. Avantis
The ETF landscape is undergoing a structural shift as financial advisors increasingly pivot from pure passive indexing toward active management. While the ETF Rule of 2019 provided the regulatory spark, current market volatility and the quest for tax efficiency have accelerated active ETF adoption.
The S&P 500 is down 1.6% so far in 2026. Meanwhile, emerging markets are up sharply, developed international markets are outperforming, and a decade-long valuation gap between US and non-US equities is finally closing.
Global conflict is on the rise in 2026, as it has been already in recent years. From Russia's invasion of Ukraine to the U.S. attacks on Venezuela and Iran, conflict has driven volatility increasingly higher.
It's no secret that investors are clamoring for ex-U.S. equities right now. Flows into international equities set a record in January.
As U.S. fund outflows hit a 16-year high and volatility spikes, emerging market ETFs offer a path to diversification and growth.
Emerging markets equities investing continues to be a top theme. Following a standout year in 2025, investors have flooded ex-U.S. equities with dollars, setting records for inflows in January.
International equities had a strong 2025, largely anchored on a focus on valuations. Now, as the opportunity broadens out and finds fundamental support, appetite for exposure to international equities among U.S. investors is quickly growing.