The MSCI Emerging Markets ex-China Index Net Total Return returned 34.53% in the second quarter, one of the strongest quarters on record for the asset class. EMM returned 29.83% (NAV return) and 28.09% (market price return) in the second quarter versus 34.53% for the benchmark. We maintain a positive outlook on EM ex-China equities.
Emerging Market (“EM”) ex-China equities delivered positive returns over a volatile quarter, supported by commodity strength and relatively attractive valuations.
Market Review
The MSCI Emerging Markets ex-China Index Net Total Return (NETR) (“the benchmark”) returned 34.53% in the
Quick Insights
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What drove EMM’s underperformance versus its benchmark in Q2 2026?
EMM's underweight to South Korea and lack of concentration in AI-exposed semiconductor names, which dominated the benchmark rally, were the largest detractors.
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How does EMM’s regional positioning reflect its forward outlook?
EMM favors Korea and Taiwan for discounted tech, India for structural growth, and Latin America for policy and commodity tailwinds, while holding off-benchmark positions in Kazakhstan and Argentina.
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What is EMM’s investment strategy and fee structure going forward?
EMM employs bottom-up fundamental analysis, targets businesses with durable advantages, and now features a reduced expense ratio of 0.65% effective April 2026.
