China equities have had their highs and lows in recent years. Having historically provided high levels of growth, debt and governance concerns saw many investors turn from them. Broad success for ex-U.S. equities last year included China equities, however. That healthy performance may be poised to continue in 2026 for investors with the right strategy, like emerging markets ETF GEM.
See more: 2025 in Review: Goldman Sachs ETFs Net $8.2 Billion in Flows
The Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM ) charges a 35 basis point fee. It returned 38.7% over the last one year period per ETF Database data. That beat its ETF Database Category average in that time, with a 25% weight to China equities as of January 9 this year.
Emerging Markets ETF GEM to Rise?
Specifically, the strategy tracks the Stuttgart Goldman Sachs ActiveBeta EM Equity index, leaning on Goldman Sachs’ multifactor approach to emphasize stocks with strong momentum, high value, and quality. As of January 9, the strategy held stock in some important names like Tencent Holdings (TCEHY) and China Construction Bank (CICHY). The fund also saw its AUM rise significantly in 2025, picking up more than $300 million in AUM in that time.
What lies ahead, then, for the fund’s China equities allocation? Goldman Sachs research projects 4.8% growth this year, driven by an anticipated surge in exports. Where consensus estimates point to a 4.5% increase, the firm’s identified its 4.8% number based on the diversification of export destinations and reduced drag from the country’s declining housing market.
Looking ahead, then, a fund like GEM could provide a helpful addition to many investor portfolios. By diversifying away from the U.S. into broader emerging markets, investors could set their portfolio up for a strong year in 2026 much like 2025 — while also reducing domestic concentration risk. For those wanting to get that foreign equities exposure, then, GEM could prove itself a diamond in the rough.
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