Emerging markets ETFs surged in May on AI-driven semiconductor gains, easing Middle East tensions and attractive valuations.
Asia's smaller companies have delivered stronger returns than the region's large-cap stocks over the past five years, while also offering lower volatility and broader sector exposure, according to HSBC Asset Management. The firm said Asia small-cap stocks outperformed their large-cap counterparts by nearly 3% annualised at the index level over the period.
The dollar hit a six-week high amid Iran deal uncertainty. ETFs tied to the dollar may gain, while gold and emerging markets could struggle.
EEM has beaten VWO by roughly 10% year-to-date in 2026, and the entire gap traces back to one geographic difference between their underlying indexes. MSCI classifies South Korea as emerging; FTSE classifies it as developed. That single definition gap means VWO holds zero Samsung and zero SK Hynix. Korea is up ~80% YTD on the AI memory shortage. Carrying that exposure inside EEM has dragged its return ahead of VWO all year.
Emerging markets investing has a recurring frustration. You buy the asset class for diversification and growth, then find that a handful of state-owned banks, commodity giants, and speculative tech names dominate the index.
Confluence Wealth Services Inc. lessened its stake in iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) by 10.3% in the undefined quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm owned 99,653 shares of the exchange traded fund's stock after selling 11,503 shares during the quarter. Confluence Wealth
Foreign investors withdrew a staggering $70.3 billion from emerging market assets in March, marking the largest monthly outflow since the market turmoil of March 2020, according to data released by the Institute of International Finance on Wednesday. The data showed that investors pulled funds from both debt and equity portfolios, reflecting a sharp reversal in sentiment.
Allium Financial Advisors LLC lifted its position in iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) by 35.3% in the undefined quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 111,066 shares of the exchange traded fund's stock after purchasing an additional 28,998 shares
I compare the Columbia EM Core ex-China ETF and iShares MSCI Emerging Markets ETF for current holdings and performance. EEM is heavily weighted to Asia, with Information Technology and Financials as top sectors, and its top 20 holdings comprise 39% of the portfolio. XCEM excludes China and Hong Kong, tracking an in-house index with up to 700 companies, market-cap weighted and rebalanced quarterly.
Emerging market ETFs are back in focus. Two of the ten largest U.S.-listed ETF inflow winners year-to-date are broad EM funds.
The ETF industry has carried its record-breaking momentum from 2025 into the new year, surpassing $100 billion in net flows before the end of January. By the end of the month, flows into U.S.
EEM Vs. EMEQ: Newcomer Off To Great Start, Thus Rated A Buy