Columbia EM Core ex-China ETF

XCEM

Market cap $1.9B

The action in Emerging Markets ETFs this year has been really interesting to watch. From record-breaking asset flows to impressive results, albeit massively dispersed, this category of funds has had quite a ride so far in 2026.

Three funds dominate the emerging markets ex-China conversation right now, and each one has put meaningful daylight between itself and the S&P 500 so far this year.

A dollar put into Columbia EM Core ex-China ETF (NYSEARCA:XCEM) on the last trading day of 2025 was worth about $1.38 by the close on June 3, 2026.

Investing in emerging markets (EM) used to be synonymous with getting exposure to China. It's an ideal notion, given that it's the second largest economy and thus commands a heavy weight in standard EM benchmarks.

Geopolitical tensions and governance concerns in China have prompted institutional investors to reallocate emerging-market exposure toward India, Brazil, Southeast Asia, and Mexico.

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

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.

It's easy to invest in China ETFs when the economy is growing quickly. But with China's sluggish economy, the entire equation changes.

Global equity ETFs have seen a steady drumbeat of inflows all year long, but one major player has been left out of the party. China has climbed a great wall of worry for years – with a property debt crisis, a disastrous equity slump, and a slow exit from COVID-19 restrictions.

U.S. investors have so many options to choose from in the domestic equities landscape. From big tech to disruptive tech to utilities and healthcare companies, there's something for all types of investors.