From Yahoo Finance: 2025-06-02 17:49:00

Vanguard Group plans to launch a new ETF targeting emerging markets excluding China, amid investor concerns over China’s trade relations. This move comes as 13 emerging markets ETFs already exclude Chinese stocks, reflecting a trend towards managing China allocations separately due to geopolitical risks and market state interventions.

Despite the growing interest in ex-China funds, recent data shows stronger flows into broad emerging markets over ex-China alternatives. Some believe that interest in ex-China funds is dwindling as Chinese stocks recover, with iShares China Large-Cap ETF gaining 35.34% in the last 12 months compared to the iShares MSCI Emerging Markets ex-China ETF’s 4.8% increase.

Jason Hsu, CIO of Rayliant Global Advisors, believes that both dedicated China ETFs and emerging markets ex-China products will coexist due to China’s size and controversy. Vanguard’s new ETF filing, submitted last Friday, will provide investors with exposure to Taiwan and India, accounting for nearly 60% of the index, in exchange for reducing China exposure.

Read more: Vanguard files for new ex-China emerging markets ETF