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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
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