How do emerging markets ETFs differ from developed markets ETFs?

Emerging markets ETFs invest in countries with developing economies, which often have higher growth but more instability. Developed-market ETFs focus on established economies, such as Europe and Japan, with more mature financial systems and lower volatility.

What is the tax treatment for dividends and capital gains from emerging markets ETFs?

Dividends from emerging markets ETFs may be subject to foreign withholding taxes at source. In contrast, capital gains are taxed under U.S. or local tax laws, depending on the investor's location and account type.

Does Vanguard have an emerging market ETF?

Vanguard offers both the Vanguard FTSE Emerging Markets ETF and the Vanguard Emerging Markets Government Bond ETF (NASDAQ:VWOB).

Are emerging market ETFs suitable for beginner investors?

Generally, emerging-market ETFs aren't the best choice for beginners looking for a tactical trade or an overweight position, given their high volatility and political risks. However, as a small allocation within a globally diversified portfolio, they can be a good way to add growth potential without taking on too much concentrated risk.

Can emerging market ETFs provide dividends?

Yes, most emerging-market ETFs pay dividends because many of their underlying companies distribute earnings. The drawback is tax inefficiency, as payouts are usually treated as foreign income, and many countries apply withholding tax at the source before the dividend even reaches investors. Keeping these ETFs in a tax-sheltered account can help offset some of those issues.

How often should I review my emerging market ETF investments?

Quarterly reviews are reasonable, even if only to reinvest distributions or confirm allocations remain aligned with your plan. A more thorough review at least once per year is useful, especially when tax information becomes available and you reassess portfolio balance.

5 Best Emerging Markets ETFs to Buy in 2026

By Tony Dong – Updated Apr 9, 2026 at 10:58 PM EST | Fact-checked by Frank Bass

Key Points

Emerging markets ETFs provide access to fast-growing economies with diversified risk.
Top ETFs include iShares Core MSCI, Vanguard FTSE, and Avantis, with various expense ratios.
Invest wisely in emerging markets ETFs by understanding fees, diversification, and liquidity.

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Top Emerging Markets ETF Comparison (as of April 2026)
ETF Name and Ticker	Expense Ratio	5-Year Annualized Return
iShares Core MSCI Emerging Markets ETF (IEMG)	0.09%	4.59%
Vanguard FTSE Emerging Markets ETF (VWO)	0.06%	4.05%
State Street SPDR Portfolio Emerging Markets ETF (SPEM)	0.07%	4.06%
Schwab Emerging Markets Equity ETF (SCHE)	0.07%	3.84%
Avantis Emerging Markets Equity ETF (AVEM)	0.33%	7.04%

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NYSEMKT: IEMG

iShares - iShares Core Msci Emerging Markets ETF

Today's Change

(-0.06%) $-0.05

Current Price

$83.51

Key Data Points

Day's Range

$83.36 - $84.10

52wk Range

$56.38 - $84.10

Volume

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The fund is market-cap weighted, meaning larger economies dominate its holdings. In mid-2026, China, India, Taiwan, and South Korea made up the bulk of the portfolio.

This ETF is widely popular, with $144 billion in assets under management (AUM), making it one of the most liquid emerging markets ETFs and featuring a tight 0.01% 30-day median bid-ask spread. While it has lagged U.S. ETFs over the last decade, this reflects the relative strength of the U.S. dollar, which has weighed on foreign equity returns.

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2. Vanguard FTSE Emerging Markets ETF

The Vanguard FTSE Emerging Markets ETF (VWO -0.03%) is one of the largest and most diversified emerging markets ETFs. It tracks the FTSE Emerging Markets All Cap China A Inclusion Index for a low 0.06% expense ratio.

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NYSEMKT: VWO

Vanguard FTSE Emerging Markets ETF

Today's Change

(-0.03%) $-0.02

Current Price

$59.88

Key Data Points

Day's Range

$59.87 - $60.27

52wk Range

$46.73 - $61.03

Volume

7.5M

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One key difference between this fund and the iShares Core MSCI Emerging Markets ETF is that it excludes South Korea. This is because FTSE classifies it as a developed market, whereas MSCI classifies it as an emerging market.

Another unique feature is the China A Inclusion designation. This designation means the fund holds Chinese stocks listed on the Shanghai and Shenzhen exchanges, rather than just H-shares traded in Hong Kong.

With more than 5,900 holdings, the Vanguard FTSE Emerging Markets ETF is even more diversified than the iShares Core MSCI Emerging Markets ETF, making it a broad-based, cost-effective way to access emerging markets. It is also available as a mutual fund.

3. State Street SPFR Portfolio Emerging Markets ETF

The State Street SPDR Portfolio Emerging Markets ETF (SPEM -0.17%) follows the S&P Emerging BMI Index (Broad Market Index), which covers small-, mid-, and large-cap stocks across emerging markets.

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NYSEMKT: SPEM

State Street SPDR Portfolio Emerging Markets ETF

Today's Change

(-0.17%) $-0.09

Current Price

$52.33

Key Data Points

Day's Range

$52.29 - $52.63

52wk Range

$40.66 - $53.03

Volume

2.4M

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NYSEMKT: SCHE

Schwab Strategic Trust - Schwab Emerging Markets Equity ETF

Today's Change

(-0.17%) $-0.06

Current Price

$36.34

Key Data Points

Day's Range

$36.32 - $36.59

52wk Range

$28.48 - $37.06

Volume

4.1M

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Despite including smaller stocks, the Schwab Emerging Markets Equity ETF is market-cap-weighted, meaning larger companies dominate its portfolio. This has resulted in a weighted average market capitalization of $327 billion, giving the fund a tilt toward large-cap stocks, similar to other major emerging markets ETFs.

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5. Avantis Emerging Markets Equity ETF

Unlike traditional index-tracking ETFs, the Avantis Emerging Markets Equity ETF (AVEM -0.04%) takes an active approach with its stock selection and weighting.

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NYSEMKT: AVEM

American Century ETF Trust - Avantis Emerging Markets Equity ETF

Today's Change

(-0.04%) $-0.04

Current Price

$96.94

Key Data Points

Day's Range

$96.71 - $97.69

52wk Range

$63.91 - $97.69

Volume

2.3M

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Emerging markets ETFs FAQ

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Tony Dong has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard FTSE Emerging Markets ETF. The Motley Fool has a disclosure policy.

5 Best Emerging Markets ETFs to Buy in 2026

Key Points

Key Data Points

2. Vanguard FTSE Emerging Markets ETF

Key Data Points

3. State Street SPFR Portfolio Emerging Markets ETF

Key Data Points

Key Data Points

5. Avantis Emerging Markets Equity ETF

Key Data Points

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Emerging markets ETFs FAQ

How do emerging markets ETFs differ from developed markets ETFs?

What is the tax treatment for dividends and capital gains from emerging markets ETFs?

Does Vanguard have an emerging market ETF?

Are emerging market ETFs suitable for beginner investors?

Can emerging market ETFs provide dividends?

How often should I review my emerging market ETF investments?

Top emerging markets ETFs to consider

Criteria for selecting the top emerging markets ETFs

Benefits and risks of investing in emerging market ETFs

Benefits

Risks

Tips for investing in emerging market ETFs

Related investing topics

FAQ

1. iShares Core MSCI Emerging Markets ETF

Key Data Points

Key Data Points

Key Data Points

2. Vanguard FTSE Emerging Markets ETF

3. State Street SPFR Portfolio Emerging Markets ETF

4. Schwab Emerging Markets Equity ETF

Key Data Points

Key Data Points

5. Avantis Emerging Markets Equity ETF