Foreign equities stood out in investor portfolios last year, diversifying portfolios away from U.S. megacap tech and adding strong returns at the same time. That momentum appears to be continuing into 2026 as one of the star funds from last year has already added more than $100 million in net inflows. Emerging markets ETF AVEM has added $103 million in the last five days — and $815 million in the last month.
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The Avantis Emerging Markets Equity ETF (AVEM ) provided investors with robust returns in 2025. Per YCharts data, the fund saw a 34.5% return for the calendar year 2025. Entering this year, its price has risen notably above both its 50- and 200-day simple moving averages (SMAs). That price movement traditionally indicates healthy momentum for a particular security — in this case an emerging markets ETF.
Does the ETF’s $100-million-plus haul in just the first week of the year augur a repeat performance in 2026? Certainly, the fund is seeing that strong momentum — and tailwinds do continue. Such funds still offer diversification away from the massive A.I. push. They also can benefit from the dollar’s potential to decline yet more.
How, then, does the ETF invest? AVEM charges its investors 33 basis points to actively invest in emerging markets stocks. The strategy invests across market caps, emphasizing small-caps with low valuations and high profits.
Looking ahead, what role could the fund play in investor portfolios? For those who have yet to add satellite exposures to foreign equities, AVEM can help. Of course, it benefits from trends more specific to emerging markets, as well. Emerging markets include nations like India and China that offer a healthy amount of upside, with the former especially seeing key trends like a rising middle class and the latter seeing its own exciting tech activity. Overall, the fund’s strong momentum makes it one to watch in the months ahead.
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