Emerging Markets ETF Outperforms S&P 500 in 2025.

The iShares Core MSCI Emerging Markets ETF (IEMG) has delivered a 30% total return in 2025, outperforming the SPDR S&P 500 ETF (SPY) which has gained around 16%. The emerging markets ETF has seen significant growth, with a notable increase in the past two days.

The iShares Core MSCI Emerging Markets ETF (IEMG) has experienced a remarkable performance in 2025, delivering a total return of approximately 30%. This significant growth has outpaced the SPDR S&P 500 ETF (SPY), which has gained around 16% during the same period. The ETF has shown notable improvement in the past two days, reflecting a broader trend of emerging markets gaining traction.

The strong performance of IEMG can be attributed to several factors. Firstly, the ETF has a trailing earnings yield of 5.78%, which is approximately 2.31% higher than the 3.46% earnings yield of the S&P 500. This indicates that the companies within the ETF are generating higher earnings relative to their valuations. Additionally, the ETF offers a well-covered current dividend yield of 2.80%, with a dividend growth rate of 5.58% over the past decade. These attractive dividend characteristics provide investors with a steady income stream.

Moreover, the ETF benefits from an above-average GDP and earnings growth outlook for the countries in which it invests. While there are differences among the countries, the overall growth prospects for emerging markets remain positive. This growth outlook supports the ETF's performance and provides investors with a promising investment opportunity.

However, it is essential to consider key risks associated with IEMG. Emerging markets are often subject to political instability, economic volatility, and currency fluctuations. These risks can impact the performance of the ETF and should be carefully evaluated by investors. Additionally, the ETF's high earnings yield may indicate that the companies are undervalued, but this could also signal that they are facing significant challenges.

In conclusion, the iShares Core MSCI Emerging Markets ETF (IEMG) has demonstrated strong performance in 2025, outperforming the S&P 500. The ETF's attractive earnings yield, dividend yield, and growth outlook make it an appealing investment option. However, investors should be aware of the risks associated with emerging markets and conduct thorough research before making investment decisions.