Emerging markets (EM) are undergoing a decisive shift in the early innings of 2026. Where do bulls and bears go from here?
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Following what to many investors felt like an eternity of underperformance, emerging market stocks have come roaring back to life in 2025. As of August 15, the widely observed MSCI Emerging Markets Index was higher by 20.6% on a YTD basis, or nearly double the returns of the S&P 500.
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 243 | $13,603.14 | $18,130.23 | $4,527.09 | 33.28% |
Jeff Ameen Spire Wealth Management | 173 | $9,157.82 | $13,358.23 | $4,200.41 | 45.87% |
| PSC PayPay Securities Corp. PayPay Securities Corp. | 132 | $5,798.84 | $10,171.26 | $4,372.42 | 75.4% |
Ana-Maria Ignat Covestor Ltd | 3,230 | $176,858.32 | $233,480.55 | $56,622.23 | 32.02% |
| MFA Millington Financial Advisors LLC Millington Financial Advisors LLC | 8,906 | $400,000.94 | $647,421.67 | $247,420.73 | 61.86% |
| ARCA Exchange | US Country |
The fund specified is a highly specialized investment vehicle that seeks to provide its investors with three times (3X) the daily leveraged exposure to its underlying index. This index is comprised of large- and mid-cap stocks from 24 emerging market countries, indicating a focus on regions with potentially high growth opportunities but accompanied by significant volatility and risk. Leveraged investment strategies like the one employed by this fund amplify gains but also increase the risk of losses, making it suitable for knowledgeable investors who have a high-risk tolerance and a well-considered strategy for leveraging emerging market growth. The fund's approach, which includes investing in financial instruments like swap agreements, ETFs, and securities that mimic the performance of the index, is designed to achieve its leveraged investment objective. It's important to note that this fund is non-diverse, which means it has a concentrated investment strategy that does not spread its risk across a wide array of securities.
These are derivative contracts through which two parties exchange financial instruments, typically involving cash flows based on a notional principal amount. For this fund, swap agreements are used to gain leveraged exposure to the underlying index without directly investing in it. This can increase the fund's ability to achieve significant returns but also elevates the risk of substantial losses.
The fund invests directly in the stocks or securities that are part of its targeted index. This direct investment strategy provides the fund with exposure to the movements and returns of large and mid-cap companies in emerging markets, aiming to mirror the index's performance as closely as possible.
ETFs that track the performance of the index are also a key component of the fund's investment strategy. These ETFs offer an efficient way to gain broad exposure to the index, while the leveraged nature of the fund aims to amplify the returns of these ETFs. However, it's critical for investors to understand that while ETFs can provide diversification within the scope of the index, the fund itself remains non-diversified and leveraged, therefore carrying a higher level of risk.