iShares MSCI Emerging Markets ex China ETF

EMXC

Market cap $20.5B

The iShares MSCI Emerging Markets ex China ETF (EMXC) is rated a buy, driven by structural capital rotation out of China and strong U.S. policy support for friend-shoring. EMXC offers concentrated exposure to Asian semiconductors and Indian financials, with TSMC, Samsung, and SK Hynix comprising over 29% of the fund. Sector allocation is heavily tilted to technology (40.39%) and financials (21.66%), making EMXC more a focused tech/financials play than a broad EM vehicle.

EMXC removes China's 25% drag from EM exposure, capturing semiconductor and financial strength across Taiwan, South Korea, and India instead. Five-year annualized outperformance of 471 basis points over EEM, with a Sharpe ratio of 0.50 vs. EEM's 0.20, makes the ex-China thesis quantifiable. Key risks include Taiwan Strait concentration (TSMC at 17.79%), India-Pakistan tensions, and fee competition from Vanguard's VEXC at 0.07%.

The iShares MSCI Emerging Markets ex China ETF (EMXC) offers large and mid-cap emerging market exposure while excluding exposure to China. EMXC has outperformed the broader EEM ETF since inception, largely due to its lack of Chinese equity exposure. TSM represents outsized exposure for EMXC and thus forming a view on this stock is key to forming a view on EMXC.

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.

Emerging markets equity returns have been driven by extreme mega-cap concentration, with index breadth collapsing to historic lows and masking weakness across much of the opportunity set. This concentration has distorted relative results for active managers, particularly those constrained by diversification rules or broad benchmarks, as small-cap underperformance and index construction limit flexibility.

The iShares MSCI Emerging Markets ex China ETF invests in emerging markets such as Taiwan, India, and South Korea. While recent headlines suggest tariffs on China will be reduced by 10%, they remain elevated at 47%, with tensions between the U.S. and China likely to simmer. Against this backdrop, EMXC offers investors the opportunity to benefit from attractive emerging markets valuations while mitigating the risk of new China tariffs.

Adventist Health System West sold 837,660 shares of EMXC valued at $52.9 million in the quarter. The change represented 8.6% of 13F reportable assets under management.

Carr Financial Group Corp added 59,138 shares of iShares MSCI Emerging Markets ex China ETF (EMXC), an estimated $3.82 million trade based on the average price for Q3 2025, according to an SEC filing dated October 7, 2025.

The on-again-off-again trade war between the U.S. and China is enough to keep investors guessing. Some investors are avoiding China stocks.

Emerging markets investing has had an overall positive year in 2025. Entering the year, with many U.S. investors underweight foreign equities, some market watchers anticipated big opportunities abroad.