In a year that has seen foreign equities ETFs stand out so strongly, emerging markets may be somewhat underrated. Broad, global equities strategies — especially those that exclude U.S. firms — have done very well as investors have looked abroad to diversify. That said, emerging markets funds can appeal, as well. The emerging market ETF GEM, for example, is sending buy signals ahead of its 10th anniversary.
The Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM ) charges a 45 basis point fee for its smart beta approach, celebrating its tenth anniversary as an ETF this month.
The emerging markets ETF has returned 19.5% YTD, according to ETF Database data. That has outperformed both its ETF Database Category and FactSet Segment averages, coming in at 16.8% and 16%, respectively.
That performance isn’t just a recent blip, either; the strategy has returned 11.3% over three years. That beat both the above averages of 10.1% and 7.3%, respectively.
Emerging Market ETF GEM in 2025
What, then, has helped the fund perform? Its strategy leans on Goldman Sachs’ multifactor approach. The ETF’s index, the Stuttgart Goldman Sachs ActiveBeta EM Equity index, emphasizes several factors in looking at investments. GEM considers stocks that exhibit good value, strong momentum, high quality, and low volatility. So, where plain-vanilla passive emerging market funds may only track a market-cap index and call it a day, an emerging market ETF like GEM can offer more.
That has led it to investments in financials, electronic technology, and technology spaces, according to ETF Database. Its largest nations by investment, meanwhile, include China, Taiwan, and India, with South Korea and South Africa coming up close behind.
Looking ahead, the strategy’s focus on emerging markets can help set it apart from broader international equities. A broader economic downturn may take a bite out of developed markets in Europe, for example, where geopolitical risk remains a key factor. Emerging markets, too, are projected to face less inflation in the coming years, where developed markets may face a sterner inflation test.
Overall, with its 10th anniversary looming, GEM can intrigue. According to YCharts, its price of $38.08 sat above both its 50- and 200-day simple moving averages, as of August 8. That could signal momentum for the fund’s price, a common buy signal.
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