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Emerging Market (“EM”) ex-China equities delivered positive returns over a volatile quarter, supported by commodity strength and relatively attractive valuations.

Emerging Market ex-China equities (measured by the MSCI Emerging Markets ex-China Index (Net) (“the benchmark”) climbed 3.16% in the first quarter, compared to a 4.35% decline in the S&P 500¹. Despite Middle East-led geopolitical volatility, EM ex-China assets proved resilient, supported by their diversified composition and allocators’ search for value. Oil prices (measured by Generic 1st ‘CO’ Future) surged 76.49% during the quarter, driving outperformance in energy-exporting countries, while energy-importing countries lagged². Latin America led performance with Colombia, Peru, and Brazil standing out as the strongest performers, while Indonesia, India, and the Czech Republic lagged. Mid-quarter pullbacks in Korea, Taiwan, and India were also notable³. The ex-China composition insulated the index from China-specific risks while preserving exposure to commodity exporters and cyclical markets.

Despite the geopolitical conflict, the U.S. Dollar Index (DXY) strengthened only 1.66%, leaving investors constructive on EM prospects⁴. A potentially dovish Federal Reserve System (Fed), elevated U.S. fiscal spending, and rising political uncertainty could pressure the dollar, which has historically supported EM performance by easing financial conditions, lowering foreign debt burdens, and supporting commodity prices. Attractive valuations, commodity exposure, structural reforms, and ongoing technology demand continued to keep the asset class in focus for allocators.

EMM returned 2.22% (NAV return) in 1Q 2026 versus 3.16% for its benchmark, resulting in -0.94% of relative underperformance⁵. On a price basis, EMM returned 3.30%, outperforming by 14 basis points⁶.

At the country level, the most notable contributions to returns came from Mexico (+0.61%), South Korea (0.16%) and Brazil (+0.14%). ⁷ Mexico benefited from both allocation and selection, while Korea’s contributions came from stock selection. Brazil added value through energy exposure and off-benchmark precious metals holdings. The fund also benefited from stock selection in Colombia (0.09%). Taiwan (-1.08%) was the largest detractor⁸. Poland (-0.17%) and India (-0.40%) also detracted, with India driven primarily by the fund’s overweight position and Poland due to stock selection⁹.

At the sector level, energy (0.21%), information technology (0.18%), and health care (0.18%) contributed positively, supported by commodity strength and continued demand for advanced semiconductors¹⁰. Industrials (-0.60%), communication services (-0.53%), and financials (-0.43%) detracted, reflecting weaker cyclical exposure and stock-specific underperformance¹¹.

At the stock level, Samsung Electronics (+3.76%) was the largest contributor, benefiting from strength in memory and AI-related demand¹². Vista Energy (+0.49%) in off-benchmark Argentina and ASPEED Technology (+0.38%) also added value¹³. The largest detractors included NAVER (-0.36%), Hon Hai Precision (-0.32%), and Alchip Technologies (-0.26%)¹⁴.

Effective May 12, 2023, the fund acquired the performance, financial, accounting, and other historical information of the Mirae Asset Emerging Markets Fund. Performance shown prior to May 15, 2023 reflects the return of the Mirae Asset Emerging Markets Fund's I shares with a NAV conversion ratio of 0.40 applied in connection with the acquisition. Market price returns prior to that date reflect the predecessor fund’s NAV return.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent quarter- and month-end, please visit globalxetfs.com/funds/emm. Total expense ratio: 0.66%.

Holdings are subject to change.

In our experience, three factors tend to drive performance across emerging markets ex-China: the U.S. dollar, U.S. interest rates, and global liquidity conditions. A steady or weakening dollar, combined with a more dovish Federal Reserve, would likely support capital flows into emerging markets. Within this backdrop, we see differentiated opportunities across regions. Korea and Taiwan offer strong technology fundamentals at discounted levels versus U.S. peers. India is expected to continue to benefit from structural growth, while ASEAN (Association of Southeast Asian Nations) markets offer favorable demographic trends. Greece, scheduled for developed market upgrade by MSCI in 2027, offers a compelling pocket of deep value with a catalyst. We are also holding off-benchmark positions in Georgia and Kazakhstan. Latin America, particularly Brazil, Argentina, and Colombia, stands out given improving policy dynamics, commodity exposure, and monetary flexibility. 

We believe active management remains critical as  EM economies do not move in lock step together. Companies that generate returns above their cost of capital, supported by strong management teams and disciplined balance sheets, should outperform. The strategy focuses on identifying businesses with durable competitive advantages and the ability to compound returns over time. EMM delivers bottom-up fundamental analysis with the fee structure, liquidity, and transparency of its ETF wrapper, now with a lower expense ratio of 65 basis points (as of April 1, 2026).

Related ETF 

EMM – Global X Emerging Markets ex-China ETF

Click the fund name above to view current performance and holdings. Holdings are subject to change. Current and future holdings are subject to risk. 

Emerging Market debt had a volatile first quarter, as an initially supportive macro environment was rocked by an oil-driven geopolitical shock.

Emerging Market debt had a volatile first quarter, as an initially supportive macro environment was rocked by an oil-driven geopolitical shock.

Indian equities saw volatility in 1Q26, with active management shaping NDIA’s relative performance.