List of Emerging Markets ETFs
A professional directory and performance comparison of the top international equity funds, designed for investors seeking global growth potential and portfolio diversification.
Navigating the List of Emerging Markets ETFs is essential for building a globally balanced portfolio. These vehicles offer exposure to rapidly developing economies like China, India, and Brazil, typically at a lower cost than active management. Many sophisticated participants choose to invest in emerging market equities to capture higher returns relative to domestic stocks.
Making strategic investments in emerging economies requires an understanding of how each fund invests in companies within specific sovereign borders. While broad index funds like VWO and IEMG offer a Complete Emerging Market ETF Overview, specialized factor funds allow for tactical risk management. This guide helps you compare liquid funds by expense ratios, regional weights, and historical returns.
Key Takeaways
Core funds capture hundreds of companies across multiple developing nations, providing a foundational Emerging Market ETF Overview.
Most major indexes are heavily weighted toward China, Taiwan, and South Korea, which can create volatility during regional geopolitical shifts.
Hedged options aim to protect returns from a strengthening U.S. dollar, which can often erode gains made in local foreign markets.
The Emerging Market ETF Overview Page shows that different benchmarks include or exclude specific countries like South Korea.
Top Developing Market Funds by Market Cap (2026)
The following table compares the largest and most liquid international stock vehicles currently available on U.S. exchanges.
| Rank | Ticker | Fund Name | Index Tracked | AUM | Exp Ratio | 1Y Return | Hedge |
|---|---|---|---|---|---|---|---|
| 1 | VWO | Vanguard FTSE Emerging Markets ETF | FTSE Emerging | $75.4B | 0.08% | +4.2% | No |
| 2 | IEMG | iShares Core MSCI Emerging Markets | MSCI EM IMI | $72.1B | 0.09% | +4.5% | No |
| 3 | EEM | iShares MSCI Emerging Markets ETF | MSCI EM | $18.5B | 0.70% | +3.8% | No |
| 4 | SCHE | Schwab Emerging Markets Equity ETF | FTSE Emerging | $8.9B | 0.11% | +4.0% | No |
| 5 | EMXC | iShares MSCI EM ex China ETF | MSCI EM ex China | $5.2B | 0.25% | +6.1% | No |
| 6 | DBEM | Xtrackers MSCI Emerging Markets Hedged | MSCI EM Hedged | $1.4B | 0.65% | +7.2% | Yes |
| 7 | FEM | First Trust Emerging Markets AlphaDEX | AlphaDEX EM | $1.1B | 0.80% | +5.4% | No |
| 8 | EWX | SPDR S&P Emerging Markets Small Cap | S&P EM SmallCap | $0.9B | 0.65% | +3.2% | No |
| 9 | FNDE | Schwab Fundamental Emerging Markets | RAFI EM Large | $0.8B | 0.39% | +4.8% | No |
| 10 | HEFA | iShares Currency Hedged EAFE ETF | MSCI EAFE Hedged | $3.8B | 0.35% | +8.1% | Yes |
How to Select an Emerging Markets Fund
When evaluating a funds investment for your portfolio, the primary consideration should be the underlying index methodology. Most exchange traded products in this category follow either MSCI or FTSE benchmarks, which differ significantly in their country classifications. For instance, FTSE considers South Korea a developed market, while MSCI keeps it in the emerging category.
A diversified emerging strategy often yields more consistent returns than picking individual winners in volatile regions. Choosing a fund that spreads capital across single countries like India, Brazil, and Vietnam can reduce the impact of a downturn in any one specific nation. This structural diversification is key to weathering regional economic cycles.
Regional and Sector Weightings
Most broad-based funds are heavily concentrated in the Technology and Financial Services sectors. These industries often drive the bulk of the growth in developing economies as digital infrastructure expands. Investors should look under the hood to ensure their fund isn't overly exposed to a single industry or a specific regulatory environment.
While broad funds are popular, some investors prefer to target single countries via specialized ETFs to overweight specific regions. This allows for a more surgical approach to global markets, such as focusing on Mexican nearshoring or Indian tech expansion. Balancing these tactical plays with a core diversified holding is a common strategy for institutional portfolios.
Managing Costs and Execution
Expense ratios are a critical factor because high fees can compound and significantly drag down performance over decades. Many major U.S. brokerages offer these international funds commission free, which allows for cost-effective dollar-cost averaging. Always compare the total cost of ownership, including the internal expense ratio and the bid-ask spread.
Liquidity is equally important for investors who may need to exit positions quickly during market stress. Funds with higher daily trading volumes generally offer tighter spreads, ensuring that you keep more of your capital. Maintaining low friction costs is one of the most effective ways to maximize your total investment returns.
Comprehensive Directory of Emerging Markets Funds
International Funds Listed on U.S. Exchanges
Broad-Based Developing Market ETFs
- BLDRS Emerging Markets 50 ADR Index ETF (ADRE) (American Depository Receipts of emerging market companies)
- EGShares Beyond BRICs ETF (BBRC) (Excludes Brazil, Russia, India and China)
- EGShares EM Core ex-China ETF (XCEM)
- EGShares Emerging Markets CORE ETF (EMCR) (Excludes South Korea and Taiwan)
- First Trust Emerging Markets AlphaDEX ETF (FEM) (Weighted towards China)
- First Trust RiverFront Dynamic Emerging Markets ETF (RFEM)
- FlexShares Morningstar Emerging Market Factor Tilt Index ETF (TLTE) (Weighted towards China, South Korea and Taiwan)
- Franklin LibertyQ Emerging Markets ETF (FLQE)
- GaveKal Knowledge Leaders Emerging Markets ETF (KLEM)
- Global X Next Emerging & Frontier ETF (EMFM) (Weighted towards emerging markets)
- Guggenheim MSCI Emerging Markets Equal Weight ETF (EWEM) (Countries are equally weighed)
- iShares Core MSCI Emerging Markets ETF (IEMG) (Weighted towards China, South Korea and Taiwan)
- iShares Edge MSCI Multifactor Emerging Markets ETF (EMGF)
- iShares MSCI Emerging Markets ETF (EEM) (Weighted towards China, South Korea and Taiwan)
- JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) (Weighted towards China and Taiwan)
- Lattice Emerging Market Strategy ETF (ROAM) (More weight on smaller emerging market countries)
- PowerShares FTSE RAFI Emerging Markets Portfolio (PXH) (Weighted towards China, Brazil and Taiwan)
- Schwab Emerging Markets Equity ETF (SCHE) (Weighted towards China, Brazil, India, South Africa and Taiwan)
- Schwab Fundamental Emerging Markets Large Company Index (FNDE) (Weighted towards large-sized companies)
- SPDR MSCI Emerging Markets Quality Mix ETF (QEMM) (Weighted towards China, South Korea and Taiwan)
- SPDR S&P Emerging Markets ETF (GMM) (Weighted towards China)
- Vanguard FTSE Emerging Markets ETF (VWO) (Weighted towards China)
- Victory CEMP Emerging Market Volatility Wtd Index ETF (CEZ)
- WisdomTree Strong Dollar Emerging Markets Equity Fund (EMSD)
Hedged and Risk-Managed ETFs
Risks & Considerations
Geopolitical & Regulatory Risk
Developing economies often face higher political instability and less stringent regulatory oversight than developed markets like the U.S. or Japan.
Currency Volatility
If local currencies weaken against the U.S. dollar, the value of your shares can drop significantly, even if the underlying stock prices remain stable.
Liquidity and Market Access
Lower trading volumes in frontier regions can lead to higher bid-ask spreads and potential difficulty exiting large positions during times of market stress.
Long Term Growth Potential
While these funds offer long term growth opportunities, they are subject to boom-and-bust cycles that can lead to multi-year periods of underperformance.
Frequently Asked Questions
There is no single best choice for every investor. Broad funds like VWO and IEMG are often used as core building blocks due to their low expense ratios.
Hedged or factor-based funds can be superior for those with specific views on currency or value-based risk management.
Both are large funds, but they track different indexes. VWO follows the FTSE Emerging Index, which excludes South Korea, whereas IEMG follows the MSCI Emerging Markets IMI, which includes it.
IEMG also provides more exposure to small-cap companies, making it a broader play on the total market capitalization of developing regions.
They are excellent for diversification because they provide exposure to economic cycles that don't move in perfect lockstep with the United States.
However, they carry higher sovereign and currency risks, meaning they should generally represent a smaller portion of a total portfolio for most investors.
The core exposure usually includes China, Taiwan, India, Brazil, and South Africa. Some indexes also include South Korea, Mexico, and Saudi Arabia.
The exact country mix depends on whether the index provider classifies a nation as "emerging" based on its economic development and market accessibility.
A currency hedged fund uses derivatives to mitigate the impact of exchange-rate fluctuations. This is useful if you expect the U.S. dollar to strengthen against the local currencies of the underlying holdings.
If the dollar weakens, however, a hedged fund will typically underperform an unhedged equivalent as it misses out on the currency gain.
China is the world's second-largest economy and has a massive number of listed companies. Because of this market weight, most broad indexes allocate 20% to 30% of their capital to Chinese equities.
Investors concerned about this concentration risk can find "Ex-China" funds that exclude the region entirely.
Yes, many do, though yields vary by country and sector. Financial and commodity-heavy funds tend to offer higher distributions than technology-focused ones.
Dividend yields in these regions can be less predictable than in the U.S. due to different corporate governance standards and profit repatriation laws.
Emerging markets focus on established developing economies like Brazil and India. Frontier markets target even less developed nations like Vietnam or Nigeria.
Frontier markets offer higher potential returns but come with significantly lower liquidity and higher transaction costs.