S&P 500 vs Emerging Markets
SPY closed near $708 in mid-April 2026; EEM traded near $52 the same week. EEM tracks MSCI Emerging Markets Index covering 25+ developing economies.
Also known as: S&P 500 ETF (SPY) (ETF_SPY, S&P 500, SPX, SP500) · Emerging Markets (EEM) (ETF_EEM, emerging markets, EM)
Why This Comparison Matters
SPY closed near $708 in mid-April 2026; EEM traded near $52 the same week. EEM tracks MSCI Emerging Markets Index covering 25+ developing economies. Country weights April 2026: China ~25.08 percent, Taiwan ~22.53 percent, South Korea ~16.15 percent, India ~12.35 percent, with Brazil, Saudi Arabia, Mexico, South Africa, Indonesia smaller. Top holdings: Taiwan Semiconductor 13.26 percent (single-largest EEM holding), Samsung Electronics, Tencent, SK Hynix, Alibaba. EEM has gained 53 percent over trailing 12 months versus SPY 17.4 percent, a 35.6 percentage point EM outperformance, the largest sustained gap in over a decade. Drivers: weaker dollar, semiconductor demand from Taiwan and Korea, renewed foreign investment in China and India, and AI capex translation questions weighing on US.
EEM Composition
EEM holds approximately 1,200 stocks across 25+ emerging markets. Country weights April 2026: China 25.08 percent, Taiwan 22.53 percent, South Korea 16.15 percent, India 12.35 percent, Brazil ~6 percent, Saudi Arabia ~4 percent, Mexico ~3 percent, South Africa ~3 percent, Indonesia ~2 percent.
Top 5 holdings: Taiwan Semiconductor 13.26 percent (single-largest EEM holding by far), Samsung Electronics ~5 percent, Tencent ~4 percent, SK Hynix ~3 percent, Alibaba ~3 percent. The semiconductor concentration is striking: TSMC plus Samsung plus SK Hynix together represent approximately 21 percent of EEM. EEM is essentially a leveraged play on semiconductor and AI hardware demand at the EM level.
Sector weights: Tech ~22 percent (semiconductor concentrated), Financials ~21 percent (Asian banks), Consumer Discretionary ~12 percent (Alibaba, Tencent, MercadoLibre), Communications ~9 percent, Materials ~7 percent, Energy ~5 percent. EEM AUM approximately $25 billion. Expense ratio 0.69 percent (the highest among major equity ETFs we cover).
The 2025-2026 EM Outperformance
EEM has gained 53 percent over trailing 12 months vs SPY 17.4 percent (35.6 percentage point EM outperformance, largest sustained gap in over a decade). Three drivers explain the rally.
First, semiconductor demand: Taiwan Semiconductor (13.26 percent of EEM) is the dominant manufacturer for Nvidia, Apple, Qualcomm AI chips. The 2024-2026 AI capex cycle has driven unprecedented TSMC revenue and capacity expansion. TSMC stock has gained roughly 80 percent in 2024-2025. Samsung and SK Hynix benefit from HBM (high-bandwidth memory) demand for AI training, both gaining 50+ percent.
Second, China stimulus and reform: 2024-2026 China policy stimulus including PBoC rate cuts, fiscal expansion, and property sector intervention has supported Chinese equities. Tencent and Alibaba have rallied 30-50 percent on regulatory clarity and stimulus.
Third, India growth story: Indian equities continued multi-year compounding. Sensex reached new highs in 2025-2026 on infrastructure spending, manufacturing reshoring, and demographic dividend.
EEM's Semiconductor Concentration
TSMC alone is 13.26 percent of EEM, the largest single-stock concentration in any major equity ETF. Combined with Samsung Electronics (~5 percent) and SK Hynix (~3 percent), semiconductor companies represent approximately 21 percent of EEM.
Conditional Forward Response (Tail Events)
How Emerging Markets (EEM) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in S&P 500 ETF (SPY). Computed from 1,289 aligned daily observations ending .
Following these triggers, Emerging Markets (EEM) falls 0.06% on average over the next 5 sessions, versus an unconditional baseline of +0.14%. 129 qualifying events; Emerging Markets (EEM) closed positive in 53% of them.
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Frequently Asked Questions
What's in EEM?+
EEM tracks MSCI Emerging Markets Index: ~1,200 stocks across 25+ emerging markets. Country weights April 2026: China 25.08%, Taiwan 22.53%, South Korea 16.15%, India 12.35%, Brazil ~6%, Saudi Arabia ~4%, Mexico ~3%, South Africa ~3%, Indonesia ~2%. Top 5: Taiwan Semiconductor 13.26% (single-largest EEM holding), Samsung Electronics ~5%, Tencent ~4%, SK Hynix ~3%, Alibaba ~3%. Semiconductor concentration: TSMC + Samsung + SK Hynix = ~21% of EEM. Sectors: Tech 22%, Financials 21%, Consumer Discretionary 12%, Communications 9%, Materials 7%, Energy 5%. EEM AUM ~$25B, expense 0.69%.
What drove the 2025-2026 EM rally?+
EEM gained 53% over trailing 12 months vs SPY 17.4% (35.6pp EM outperformance, largest sustained gap in over a decade). Three drivers. First, semiconductor demand: Taiwan Semiconductor 13.26% of EEM is dominant manufacturer for Nvidia/Apple/Qualcomm AI chips. TSMC stock +80% 2024-2025. Samsung and SK Hynix benefit from HBM (high-bandwidth memory) for AI training, both +50%. Second, China stimulus: 2024-2026 PBoC cuts, fiscal expansion, property sector intervention. Tencent and Alibaba +30-50% on regulatory clarity. Third, India growth: Sensex new highs on infrastructure, manufacturing reshoring, demographic dividend.
How concentrated is EEM in semiconductors?+
TSMC alone is 13.26% of EEM, the largest single-stock concentration in any major equity ETF. Combined with Samsung Electronics (~5%) and SK Hynix (~3%), semiconductor companies represent ~21% of EEM. Risk: TSMC company-specific issues (China geopolitical tensions, Taiwan Strait risk, customer concentration with NVDA/Apple) produce material EEM moves. Opportunity: TSMC dominance of advanced semiconductor manufacturing means EEM benefits disproportionately from AI hardware cycle. EEM captures AI manufacturing while SPY (with Nvidia ~7%) captures AI design and software.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.