Capitalizing on Regional Power Dynamics in Emerging Markets: Strategic Opportunities in ILF and AIA ETFs

The 2024 U.S. election reshaped global investor sentiment, triggering a surge in demand for emerging market equities as traders recalibrated portfolios to navigate Trump-era trade policies and fiscal shifts. Among the most notable beneficiaries were the iShares Latin America 40 ETF (ILF) and the iShares Asia 50 ETF (AIA), which outperformed broader regional benchmarks in the post-election period. ILF, tracking Latin American equities, ranked as the second-strongest regional ETF in 2025, trailing only AIA, which capitalized on Asia-Pacific growth driven by AI and corporate governance reforms. This divergence reflects a broader realignment of capital toward markets with structural resilience and policy clarity, particularly in India, South Korea, and Chile.

Post-Election Dynamics: Trade Policy and Investor Behavior

The 2024 election outcome introduced significant uncertainty, with Trump's proposed tariffs on Chinese imports and a universal 10% levy on other goods spurring immediate market reactions. Emerging market ETFs, including ILF and AIA, faced mixed pressures: while Chinese-focused funds like the iShares MSCI China ETF (MCHI) declined 9% post-election, non-China exponents such as EMXC fell only 4%, signaling relative stability in diversified portfolios according to market analysis. U.S. ETFs saw record inflows, with $262 billion traded on the day after the election as investors flocked to financials and small-cap funds like the Vanguard Financials ETF (VFH) and SPDR Portfolio S&P 600 Small Cap ETF (SPSM) according to ETF trends. However, the long-term outperformance of ILF and AIA suggests that investors are increasingly prioritizing geographic diversification over short-term U.S.-centric bets.

India: A Policy-Driven Growth Story

. India's economic trajectory post-2024 election has been marked by resilience and strategic policy alignment. The U.S. announced plans to reduce tariffs on Indian imports from 50% to 15-16%, contingent on India curbing Russian oil purchases-a move expected to boost exports in textiles, engineering goods, and pharmaceuticals. Concurrently, India's GDP growth projections were upgraded to 6.9% for 2024 and 6.6% for 2025, supported by infrastructure investment and a robust banking system. India-focused ETFs like the iShares MSCI India ETF (INDA) gained 2.1-3.5% year-to-date in 2025, reflecting optimism about structural reforms and trade normalization. For ILF, which includes Indian equities via its regional exposure, this trend underscores a compelling case for long-term capital appreciation.

South Korea: AI and Trade Liberalization Fuel Growth

South Korea's post-election performance was driven by two key factors: AI-driven industrial innovation and a landmark U.S.-Korea tariff agreement. The U.S.-ROK Technology Prosperity Deal, negotiated at APEC 2025, included a 15% tariff on Korean auto imports in exchange for a $350 billion U.S. investment commitment, while also fostering collaboration in AI and critical technologies. This catalyzed a 75% year-to-date rally in the EWTY ETF, with SK Hynix and Samsung Electronics leading gains in memory chips and semiconductors according to market reports. Additionally, corporate governance reforms, including amendments to the Commercial Act, enhanced shareholder rights and transparency, further attracting institutional capital. For AIA, which holds South Korean equities, these developments highlight a sectoral shift toward high-margin, export-oriented industries.

### Chile: Commodity Resilience and Structural Reforms
Chile's economic performance in 2025, projected to grow 2.4%, was bolstered by moderated consumption and trade facilitation efforts amid global supply chain realignments. The ILF ETF, which includes Chilean heavyweights like Nu Holdings Ltd. (11.47% of assets) and Itau Unibanco (7.42%), benefited from the country's pivot toward renewable energy and mining innovation. While U.S. protectionist policies initially pressured Chilean markets, the nation's strategic position as a lithium and copper supplier to decarbonization efforts offset risks. ILF's 23.87% rally through late 2025 underscores the fund's ability to capture growth in resource-driven economies.

Strategic Case for Immediate Exposure

The outperformance of ILF and AIA post-2024 election is underpinned by their exposure to high-growth equities in structurally resilient markets. For ILF, Chilean financials and Indian infrastructure stocks offer diversification from U.S. market concentration, while AIA's focus on South Korean AI and semiconductor firms aligns with global tech demand. However, risks persist: Trump's tariff agenda could disrupt supply chains, and geopolitical tensions may delay U.S.-China trade deals. Investors should balance these risks with the long-term potential of emerging markets, particularly in sectors like AI, renewable energy, and industrial innovation.

In conclusion, the post-2024 election landscape presents a unique window for capitalizing on regional power dynamics. By leveraging ILF's exposure to Latin America's commodity-driven growth and AIA's alignment with Asia's tech-led renaissance, investors can position portfolios to thrive in an era of shifting trade policies and geopolitical realignments.