Nerdy takeaways
- Emerging markets, as defined by MSCI, are 24 developing countries with volatile, fast-growing economies.
- Emerging market investments can provide diversification and potentially rapid growth to a portfolio, but they can also be risky.
- You may also be able to buy individual emerging market stocks, although this may not be right for every investor.
Emerging markets are countries with fast-growing economies. They’re also called developing economies or developing countries. Emerging markets are often contrasted with so-called “established markets” or “advanced economies” like the U.S., which tend to be wealthier and more stable, but slower-growing.
Index provider MSCI classifies 24 countries as emerging markets. They're listed below:
- Brazil
- Chile
- China
- Colombia
- Czechia
- Egypt
- Greece
- Hungary
- India
- Indonesia
- Kuwait
- Malaysia
- Mexico
- Peru
- Philippines
- Poland
- Qatar
- Saudi Arabia
- South Africa
- South Korea
- Taiwan
- Thailand
- Turkey
- United Arab Emirates
You may notice that certain notable emerging markets, such as Russia, are missing from the list above.
There is no universal standard for noting which countries are emerging markets, and indexers like MSCI often have geopolitical concerns to work around. Russia, for example, is an emerging market by most definitions. But it’s largely unavailable to Western investors for reasons related to the Russia-Ukraine war, so MSCI stopped tracking it in 2022.
Should I invest in emerging markets?
Investing in emerging markets might sound advanced or out of reach for novice investors, but there’s a strong argument for diversifying outside of the U.S. Even simple portfolios, such as those that contain only two or three funds, often include some exposure to international stocks. After all, a stock market crash in the U.S. might not hit international markets as hard.
In 2025, concerns related to the effects of new tariffs have hammered U.S. stocks. But many publicly traded companies in emerging markets do most of their business domestically, and aren't particularly vulnerable to disruptions of trade with the U.S.
However, there's a catch. In theory, faster GDP growth in emerging markets should also translate into faster stock market growth, but this doesn’t always work out in practice. Many of the ETFs listed above have underperformed the S&P 500 over the last five years, for a variety of reasons.
Some emerging markets, such as Kuwait and Saudi Arabia, have energy-dominated economies that tend to boom when oil prices are high, and decline when they’re low. Others, such as Poland and Turkey, have unique security risks because they border active war zones.
There’s a common thread between these underperformances: Emerging markets tend to be less stable than established markets. They may be faster-growing, but that fast growth is more vulnerable to interruptions, like shifts in global resource markets or armed conflict.
One way to manage this kind of risk is by investing in several emerging markets at once through a diversified emerging markets ETF, rather than a country-specific one.
» Interested in ETFs? Check out the best ETFs tracking popular indexes
9 top-performing emerging market ETFs as of June 2026
Below is a list of the nine best-performing emerging markets ETFs listed by Finviz, ranked by one-year return.
The best-performing emerging market ETF by one-year return is iShares MSCI South Korea ETF (EWY), which is up 162.44%. | ||||
|---|---|---|---|---|
Ticker | Company | Performance (Year) | ||
EWY | iShares MSCI South Korea ETF | 162.44% | ||
FLKR | Franklin FTSE South Korea ETF | 152.66% | ||
MKOR | Matthews Korea Active ETF | 132.43% | ||
KSTR | KraneShares SSE STAR Market 50 Index ETF | 124.90% | ||
EMEQ | Nomura Focused Emerging Markets Equity ETF | 124.82% | ||
CNXT | VanEck ChiNext Innovators ETF | 111.56% | ||
FLTW | Franklin FTSE Taiwan ETF | 97.07% | ||
EWT | iShares MSCI Taiwan ETF | 90.54% | ||
FTHF | First Trust Emerging Markets Human Flourishing ETF | 84.02% | ||
Source: Finviz. Data is current as of July 1, 2026, and is intended for informational purposes only. | ||||
Of course, it’s worth researching an ETF before you buy it, just as you would research stocks. Different emerging markets ETFs may have different holdings — and if you’re looking for exposure to a specific company in an emerging market, you may want to consider investing in it directly.
» More on index funds: Check out some of the best index funds in terms of long-term performance.
Investing in emerging market stocks
There are a few emerging market stocks that are directly listed on U.S. exchanges — largely bank stocks. For example, HDFC Bank, India’s largest bank, trades on the New York Stock Exchange under the ticker “HDB.”
Some others are available via over-the-counter (OTC) markets — although it’s worth checking an OTC emerging market stock’s trading volume on a website like Yahoo Finance or Google before buying it. Buying a low-volume OTC stock at a good price can be tricky.
Even large conglomerates like South Korea’s Hyundai (HYMTF) are largely overlooked by U.S. investors because they trade OTC. They may only change price a few times per trading day due to a lack of buyers and sellers. That can result in buy or sell orders going through at suboptimal prices, or not going through at all. Limit orders can somewhat mitigate this risk.
A third way to invest in individual emerging market stocks is to open an account with a broker that allows Americans to trade directly on foreign stock exchanges. However, only a few brokers offer this feature, and those that do may have special requirements for would-be foreign stock traders.
It’s also worth considering that you may be subject to the investment taxes and laws of the host country while investing directly in its stock market.
You can check out our list of the best brokerage accounts for stock trading to learn more.
Neither the author nor editor owned positions in the aforementioned investments at the time of publication.
Frequently Asked Questions
Are emerging markets the poorest countries?
Emerging markets are often poorer than advanced economies, but on a global scale, they’re upper-middle-income countries, for the most part.
In economics terminology, countries with very low GDPs, such as Afghanistan or the Democratic Republic of the Congo, are referred to as “least-developed countries,” or LDCs.
Although LDCs may have the potential for rapid economic growth in the future, many are largely inaccessible (or extremely hazardous) to international investors today, due to some combination of lack of infrastructure, active conflict, or lack of a functioning legal or banking system.
Is investing in emerging markets the same as forex?
No — investing in emerging markets means investing in stocks from other countries, while forex involves trading the currencies of other countries.
Forex is a complicated and risky market that may not be appropriate for novice investors. But if you feel you’re capable of trying your hand at it, check out our list of the best forex brokers.
Explore more on
Article sources
NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.
