Last Updated on August 17, 2025
Emerging markets are becoming a vital component of a diversified investment portfolio. With rapid economic growth in countries like China, India, Brazil, and across Southeast Asia, these markets can offer attractive long-term returns. The key to gaining exposure efficiently is through exchange-traded funds (ETFs). In this guide, we explore the best ETFs for emerging markets, focusing on both EU and US options, and explaining where you can buy them.
Why Emerging Markets Matter for Investors
Emerging markets can provide higher growth potential compared to developed economies, but they also carry higher volatility. By investing in ETFs, you can gain diversified exposure to hundreds of companies across multiple regions, reducing the risks associated with picking individual stocks.
Best ETFs for Emerging Markets – EU & US Access
One major consideration for investors is ETF availability, as US-domiciled ETFs are generally not accessible to EU retail investors due to PRIIPs regulations. Instead, EU investors use UCITS ETFs, which comply with European standards.
Below is a comparison table showing the top ETFs for emerging markets, which regions they cover, their expense ratios, and where you can trade them.
Comparison Table: Best Emerging Markets ETFs (EU & US)
| ETF Name | Region Focus | Availability | Expense Ratio | Exchange | UCITS-Compliant |
|---|---|---|---|---|---|
| Vanguard FTSE Emerging Markets ETF (VWO) | Broad Emerging Markets | US | 0.08% | NYSE Arca | ❌ |
| iShares MSCI Emerging Markets ETF (EEM) | Broad Emerging Markets | US | 0.69% | NYSE Arca | ❌ |
| iShares Core MSCI Emerging Markets ETF (IEMG) | Broad Emerging Markets | US | 0.09% | NYSE Arca | ❌ |
| SPDR S&P Emerging Markets Dividend ETF (EDIV) | High-Dividend EM Stocks | US | 0.49% | NYSE Arca | ❌ |
| KraneShares MSCI China ETF (KBA) | China | US | 0.55% | NYSE Arca | ❌ |
| iShares Core MSCI Emerging Markets IMI UCITS ETF (EIMI) | Broad Emerging Markets | EU | 0.18% | LSE, Xetra, Euronext | ✅ |
| Vanguard FTSE Emerging Markets UCITS ETF (VFEM) | Broad Emerging Markets | EU | 0.22% | LSE, Euronext | ✅ |
| SPDR MSCI Emerging Markets UCITS ETF (SPYM) | Broad Emerging Markets | EU | 0.18% | LSE, Xetra | ✅ |
| Xtrackers MSCI Emerging Markets UCITS ETF (XMME) | Broad Emerging Markets | EU | 0.20% | Xetra, Euronext | ✅ |
| Lyxor MSCI Emerging Markets UCITS ETF (LEMG) | Broad Emerging Markets | EU | 0.30% | Euronext Paris | ✅ |
💡 Understanding ETF Access
US-domiciled ETFs like VWO and IEMG are among the best ETFs for emerging markets for American investors due to their low expense ratios and high liquidity. However, EU investors need UCITS-compliant equivalents such as EIMI or VFEM, which are available on European exchanges like the London Stock Exchange (LSE), Xetra, and Euronext.
Where to Buy These ETFs
- EU Investors:
- DEGIRO – Low-cost broker with wide UCITS ETF availability.
- Interactive Brokers – Offers global market access, including both EU and US ETFs (for professional accounts).
- Trading 212 – Commission-free trading on many UCITS ETFs.
- US Investors:
- Fidelity, Charles Schwab, and Vanguard – Offer commission-free ETF trading.
- Robinhood – For retail traders seeking quick execution and no minimum deposit.
Performance Trends & Risks
Historically, emerging markets ETFs have shown strong performance during periods of global economic expansion. However, they can be sensitive to currency fluctuations, political instability, and trade tensions. For example, the MSCI Emerging Markets Index delivered annualized returns of around 7–9% over the past decade but with notable volatility.
Conclusion
Choosing the best ETFs for emerging markets depends on where you live, your risk tolerance, and your investment horizon. US investors benefit from low-cost, high-liquidity ETFs like VWO, while EU investors can access similar exposure through UCITS ETFs such as EIMI or VFEM. By selecting the right product and platform, you can tap into the growth of emerging economies while managing risk.
Our team thinks that the emerging markets are a great way to diversify your portfolio as a lot of ETFs out there rely heavily on the US stocks as well as other developed countries. If your goal is to lower your risk as much as possible (if you are investing mainly in the US and EU) while still getting a decent growth then go for it. On the other hand if you are willing to take a greater risk with potentially greater rewards then there are better ways to do that.
You can check out one risky but potentially highly rewarding option here.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial or investment advice. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.