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3 iShares ETFs beat S&P 500 by 30 points, with EMXC up 39%, FRDM up 41%, and XCEM up 36%, outpacing the S&P 500's 9% gain, what's driving their success
The iShares MSCI Emerging Markets ex China ETF (NASDAQ:EMXC) is up 39% year to date, outpacing the S&P 500's 9% gain [1]. This significant gap is also seen in the Freedom 100 Emerging Markets ETF (NYSEARCA:FRDM) and Columbia EM Core ex-China ETF (NYSEARCA:XCEM), which are up 41% and 36%, respectively, indicating a strong performance in emerging markets excluding China.
| At a glance | |
|---|---|
| EMXC year-to-date return | 39% |
| FRDM year-to-date return | 41% |
| XCEM year-to-date return | 36% |
| S&P 500 year-to-date return | 9% |
The strong performance of these ETFs can be attributed to their exclusion of China, which has historically dominated emerging market indexes [1]. By carving out China, these funds are able to focus on other emerging markets such as India, Taiwan, and South Korea. The EMXC, for example, has a diversified portfolio of 650 individual holdings and offers a competitive expense ratio of 0.25% [1]. In contrast, the FRDM has a unique country-level filter that screens out authoritarian regimes, resulting in a slightly higher expense ratio of 0.49% [1].
The performance of these ETFs is also notable when compared to other S&P 500-tracking ETFs such as the Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) [2]. While these ETFs have similar expense ratios and track the same underlying index, they differ in their holdings and dividend yields. The VOO, for example, has a slightly lower expense ratio of 0.03% and a trailing-12-month dividend yield of more than 1% [2].
| ETF | Expense Ratio | Dividend Yield |
|---|---|---|
| VOO | 0.03% | 1% |
| IVV | 0.03% | 1% |
| EMXC | 0.25% | 1.9% |
| FRDM | 0.49% | - |
| XCEM | - | - |
The outperformance of these iShares ETFs raises questions about the role of China in emerging market indexes and the potential benefits of excluding it [1]. As investors continue to seek diversified portfolios, the performance of these ETFs will be closely watched, and their success could have significant implications for the broader market.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 3 outlets · Jul 6, 2026 · How we report
Sources report the S&P 500 is up roughly 9% to 10% year‑to‑date.
FactSet projects a 24.1% earnings growth rate for the calendar year 2026.
The S&P 500 includes all large‑cap U.S. sectors, while the Nasdaq‑100 (tracked by QQQ) excludes financials and is weighted heavily toward technology and communication services.
The recent rally was influenced by the ‘Magnificent 7’—Microsoft, Meta, Amazon, Apple, and similar large‑cap tech companies.
Those ETFs have posted year‑to‑date gains of 36%–41%, substantially higher than the S&P 500’s roughly 9% gain.