This Emerging Markets ETF Beat the S&P 500 for 16 Years. Could It Happen Again?

If you privation to bargain immoderate of the world's starring AI spot stocks, the iShares MSCI Emerging Markets ETF (NYSEMKT: EEM) mightiness beryllium a bully choice. It holds a portfolio of much than 1,100 planetary stocks successful fast-growing economies beyond America.

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Emerging markets stocks are often described arsenic "risky" compared to U.S. stocks. But this emerging markets ETF has a way grounds of outperforming the S&P 500 index. Could it support beating U.S. stocks?

Let's instrumentality a person look astatine this planetary ETF and spot wherefore it mightiness beryllium worthy adding to a semipermanent portfolio.

iShares MSCI Emerging Markets ETF (EEM): 1,194 stocks, 3 years of 22.9% annualized returns

The iShares MSCI Emerging Markets ETF holds a portfolio of 1,194 large-cap and mid-cap stocks from emerging markets. More than 10 countries are represented successful the fund, and the apical 5 markets are:

• Taiwan: 27.8% of the money

• China: 20.5%

• South Korea: 19.9%

• India: 11.6%

• Brazil: 4.1%

Taiwan and South Korea are location to immoderate of the astir in-demand tech stocks of companies that marque semiconductors and AI representation chips. The fund's 5 largest banal holdings are household names to investors who travel the Asian AI trade: Taiwan Semiconductor Manufacturing, Samsung Electronics, SK Hynix, Tencent, and Alibaba Group. These 5 tech stocks marque up astir 33.4% of the fund.

During the past 3 years, this money has delivered mean yearly returns of 22.9%, and an awesome 45.06% instrumentality successful the past year, powerfully outperforming the S&P 500.

Should semipermanent investors bargain the iShares MSCI Emerging Markets ETF?

Investing successful emerging markets stocks is not for the faint of heart. Countries with processing economies are sometimes viewed arsenic riskier places for investors compared to the U.S., due to the fact that they tin beryllium much susceptible to planetary crises. For example, successful the period pursuing the outbreak of the Iran warfare successful precocious February, the iShares MSCI Emerging Markets ETF mislaid astir 13.5% of its value.