Avantis Emerging Markets Equity ETF

AVEM

Market cap $20.5B

As U.S. fund outflows hit a 16-year high and volatility spikes, emerging market ETFs offer a path to diversification and growth.

Emerging markets equities investing continues to be a top theme. Following a standout year in 2025, investors have flooded ex-U.S. equities with dollars, setting records for inflows in January.

iShares MSCI USA Value Factor ETF (NYSEARCA:VLUE) targets a specific investor problem: capturing value stock outperformance without the concentration risk of individual stock picking.

Most emerging market ETFs are built around the same assumption: that China's economy and equity markets will drive returns for decades.

International equities had a strong 2025, largely anchored on a focus on valuations. Now, as the opportunity broadens out and finds fundamental support, appetite for exposure to international equities among U.S. investors is quickly growing.

Even the tidal wave of tariffs wasn't enough to hold back the rally in global equities last year. As it turns out, emerging markets were the single best-performing major regional indices in 2025.

Even the tidal wave of tariffs wasn't enough to hold back the rally in global equities last year. As it turns out, emerging markets were the single best-performing major regional indices in 2025.

At the same time developed markets have been generating policy and macro noise, emerging markets have been quietly outperforming. The inextricable relationship between the direction of U.S. monetary policy and emerging market risk assets remains powerful, but this time the rally is not just about the Fed.

As concerns over Fed independence, credit card rate caps and international conflicts weigh on U.S. markets, emerging market ETFs offer a path to diversification and growth.

Emerging markets climbed over 25% in 2025 while trading at deep discounts to U.S.