Since the launch of the SPDR S&P 500 ETF Trust (ticker: SPY) in 1993, one clear trend in the exchange-traded fund (ETF) market has been increasing specialization.
Investors can see this on the bond side, where issuers have gone well beyond indexing the Bloomberg U.S. Aggregate Bond Index. Today’s ETF landscape includes products targeting every segment of the fixed-income market: junk bonds, collateralized loan obligations (CLOs), senior loans and convertible bonds.
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The equity side has evolved just as much. Investors have moved past simple broad-market trackers to funds using derivatives to boost income, deliver leverage or isolate exposure to single sectors.
Factor-based ETFs that tilt toward investment styles like quality, momentum or value are also part of this expansion, as are thematic ETFs that target trends like clean energy and artificial intelligence (AI).
Another fast-growing corner of the ETF market? International ETFs. And not just the ones that exclude U.S. stocks or track developed markets like the EAFE region (Europe, Australasia and the Far East). Increasingly, issuers are rolling out strategies specifically focused on emerging markets.
“The term ’emerging markets’ refers to countries that are in the middle stage of their development, only recently industrialized, or just opened their markets up to foreign investment,” explains Brendan Ahern, chief investment officer at KraneShares. “The largest examples include China, India and Brazil, with some other examples being Turkey, Thailand and Indonesia.”
While some ETFs still offer broad emerging-market exposure, today’s lineup lets investors take much more targeted views, like betting on India’s long-term growth or gaining exposure to China’s tech sector.
“A growing global middle-class population within emerging-market countries could fuel economic expansion at a multiple of general global GDP growth as long as there is enough support,” says Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.
Here are seven of the best emerging-market ETFs to buy today:
| ETF | Expense ratio |
| Vanguard FTSE Emerging Markets ETF (VWO) | 0.07% |
| KraneShares CSI China Internet ETF (KWEB) | 0.70% |
| Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) | 0.65% |
| VanEck Vietnam ETF (VNM) | 0.68% |
| VanEck India Growth Leaders ETF (GLIN) | 0.76% |
| Global X MSCI Argentina ETF (ARGT) | 0.59% |
| Invesco Emerging Markets Sovereign Debt ETF (PCY) | 0.50% |
Vanguard FTSE Emerging Markets ETF (VWO)
“Emerging-market ETFs present an easy, diversified, low-transaction-cost and low-friction path to invest in emerging-market countries using a brokerage account or with the help of a financial advisor,” Schulman says. “When selecting emerging-market ETFs, you should consider whether you want broad exposure to multiple developing economies around the globe, or a focus on a specific country.”
For a core allocation, it’s hard to beat the diversification offered by VWO. This Vanguard ETF tracks more than 5,900 market-cap weighted emerging-market stocks represented by the FTSE Emerging Markets All Cap China A Inclusion Index. The top countries represented in VWO include China, India and Taiwan. Vanguard also recently reduced VWO’s expense ratio from 0.08% to 0.07%.
KraneShares CSI China Internet ETF (KWEB)
“We believe it is also important for investors to understand that not all emerging markets are created equal,” Ahern says. “In particular, China is unique within emerging markets due to its size as the second-largest economy in the world, and its performance characteristics.” For China, Kraneshares’ flagship ETF is KWEB, which tracks the CSI Overseas China Internet Index for a 0.7% expense ratio.
“As China has differentiated itself from the rest of emerging-market countries from a risk and return standpoint, we believe investors should have a dedicated allocation to the country rather than just lumping it into broad emerging markets,” Ahern says. Top holdings in KWEB include Alibaba Group Holding Ltd. (BABA), Tencent Holdings Ltd. (OTC: TCEHY) and Baidu Inc. (BIDU).
Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR)
“With the current truce in the ongoing China-U.S. trade wars, China appears to be maintaining its economic position,” notes Aram Babikian, head of Xtrackers sales, U.S. onshore, wealth at DWS Group. Investors looking to bet on a positive resolution to the current China-U.S. trade war may want to consider ASHR, which is one of the few China equity ETFs to offer A-Shares exposure.
“Out of the 300 companies in the CSI 300 index, only 78 are dual-listed in Hong Kong, and these dual-listed H-shares account for about 32.5% of the total market cap within the index,” Babikian explains. “ASHR offers access to the domestic companies not represented in the H-Share market that many foreign investors are restricted from directly purchasing.” ASHR charges a 0.65% expense ratio.
VanEck Vietnam ETF (VNM)
“Vietnam has rapidly become a key beneficiary of global supply chain diversification, with strong foreign direct investment and a young, increasingly skilled workforce driving industrial and export growth,” explains John Patrick Lee, product manager at VanEck. “The country’s stable macroeconomic environment, expanding middle class and rising domestic consumption further support its trajectory.”
Vietnam is more accurately characterized as a frontier market rather than an emerging one. This is a term typically used for countries that are even earlier in their economic and market development, with smaller, less liquid stock markets and more limited access for foreign investors. Exposure to Vietnam can be achieved via VNM, which has been around since 2009 and now has more than $420 million in assets.
VanEck India Growth Leaders ETF (GLIN)
“India remains one of the most compelling opportunities within emerging markets, supported by a powerful combination of structural reforms, resilient domestic demand and an increasingly competitive manufacturing sector,” Lee explains. “A young, tech-oriented population continues to drive innovation and consumption, reinforcing India’s strength as both a production hub and a large consumer market.”
GLIN targets Indian equities, but via a growth potential at a reasonable price (GARP) strategy instead of market-cap weighting. “Government-led initiatives in digital infrastructure, tax reform and ease of doing business have laid the groundwork for sustainable growth for India, while global supply chain realignments are making India an attractive alternative to China for multinational firms,” Lee says.
Global X MSCI Argentina ETF (ARGT)
“Despite delivering the strongest single-country performance in the world last year, Argentina continues to offer a rare combination of value and growth,” says Malcolm Dorson, senior vice president, head of the active investment team and senior emerging-markets portfolio manager at Global X ETFs. “ARGT continues to stand out as the first and only product delivering direct access to Argentina.”
This ETF tracks the MSCI All Argentina 25/50 Index, which holds 24 companies screened for size and liquidity. It currently has more than $1.1 billion in assets and charges a 0.59% expense ratio. “With inflation decelerating, capital controls easing and sentiment improving, Argentina’s economic comeback is building credibility,” Dorson says. “May saw a 9% bump in approval for President Milei’s administration,” Dorson says.
Invesco Emerging Markets Sovereign Debt ETF (PCY)
Emerging-market ETFs aren’t just limited to owning stocks. Investors can also earn higher-than-average income by targeting bonds. For example, the government-issued, or sovereign bonds, of countries like Pakistan, Jordan, Guatemala and Panama carry higher default risk than U.S. Treasurys, but they pay a greater yield to compensate. PCY offers exposure to such bonds.
“PCY, which tracks the DBIQ Emerging Markets USD Liquid Balanced Index, takes an equal-weight approach to country exposure within the U.S. dollar-denominated, emerging-market sovereign bond segment,” says Jason Bloom, head of fixed income and alternatives ETF product strategy at Invesco. The ETF currently pays a 7% 30-day SEC yield with monthly distributions and charges a 0.5% expense ratio.
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7 Best Emerging-Market ETFs to Buy for 2025 originally appeared on usnews.com
Update 06/05/25: This story was previously published at an earlier date and has been updated with new information.
