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

The article analyzes the iShares MSCI Emerging Markets ETF (EEM), which has outperformed the S&P 500 over the past three years with 22.9% annualized returns and 45.06% in the past year. The fund holds 1,194 stocks from emerging markets, heavily concentrated in Taiwan (27.8%), China (20.5%), South Korea (19.9%), India (11.6%), and Brazil (4.1%). Its top holdings include Taiwan Semiconductor, Samsung, SK Hynix, Tencent, and Alibaba, which together make up 33.4% of the fund. The article notes that from its inception in April 2003, the ETF outperformed the S&P 500 for 16 consecutive years (428% vs 356.2% total return). However, it warns of risks including geopolitical instability (citing a 13.5% loss during the Iran war outbreak) and currency risk from a strengthening U.S. dollar. The piece concludes by questioning whether this outperformance can continue.