About 30 ASX ETFs cover Asia and emerging markets, holding roughly $13 billion. In the year to 30 September 2026 the winners were the funds heavy in TSMC, Samsung and SK hynix: IKO (South Korea) rose 125% and ASIA 55%. China (IZZ −19.5%) and India (NDIA −17.2%) fell. The biggest fund, VGE, rose just 6% because its index leaves out Korea.
Why Asia is worth a look
Most Australian portfolios are built from Australian shares plus a global fund such as VGS. VGS follows developed markets only, so it holds no Chinese, Indian, Taiwanese or Korean companies at all. Yet those markets include some of the world's most important businesses, such as Taiwan Semiconductor (TSMC), which makes most of the world's advanced chips.
An Asia or emerging markets ETF fills that gap. The catch is that the names are confusing. "Emerging markets", "Asia 50", "Asia ex-Japan" and "Asia tech" can hold very different things, and the past year shows how much that matters.
The past year: a chip story
Korea and Taiwan soared, China and India fell
Look inside the winners and the same three companies keep appearing. TSMC, Samsung Electronics and SK hynix make the chips and memory that power artificial intelligence data centres. They are 47% of IKO, 52% of IAA and about 35% of ASIA. Funds with less of them, or none, did far worse.
Share of each fund in TSMC, Samsung and SK hynix
Broad emerging markets: VGE vs IEM and the rest
Index providers disagree about Korea. FTSE, whose index VGE follows, treats South Korea as a developed market and leaves it out. MSCI, followed by IEM, BEMG and EMXC, counts it as emerging. That one rule explains why VGE rose 6.0% while IEM rose 21.2%, and why the two funds are only about 51% the same.
| ETF | What it covers | Fee | Size | 1 year | 3 years (a year) | 5 years (a year) |
|---|---|---|---|---|---|---|
| VGE Vanguard | FTSE EM, no Korea | 0.48% | $2.2bn | +6.0% | +13.6% | +5.8% |
| IEM iShares | MSCI EM | 0.69% | $1.8bn | +21.2% | +19.7% | +8.2% |
| EMKT VanEck | MSCI EM, multifactor | 0.69% | $839m | +39.6% | +25.9% | +14.7% |
| EMXC iShares | MSCI EM excluding China | 0.25% | $395m | +42.4% | n/a | n/a |
| BEMG Betashares | MSCI EM | 0.35% | $208m | +23.0% | n/a | n/a |
| FEMX Fidelity | Active EM | 0.99% | $165m | +14.1% | +12.6% | +4.0% |
| WEMG State Street | S&P EM, carbon aware | 0.35% | $32m | +6.8% | +15.3% | +6.5% |
Total returns to 30 September 2026; 3 and 5-year figures per year. Source: TMX Australia monthly funds report.
- BEMG is a cheaper way to own the same MSCI index as IEM (0.35% vs 0.69%), with about 73% overlap. It is newer and smaller.
- EMXC removes China entirely, which raises Taiwan to about 36% and Korea to about 23%. It suits investors who want emerging markets without Chinese political risk, but it is even more of a chip bet.
- EMKT tilts towards cheaper, higher-quality companies and has the best 3 and 5-year records of the group.
Country mix of the main Asia and EM funds
Compare the pairs: VGE vs IEM, IEM vs BEMG, VGE vs EMXC and VGE vs EMKT.
Asia ex-Japan and Asian tech
- IAA holds the 50 largest Asian companies outside Japan for 0.29%. It is 70% technology and over half in the three chip makers. Up 50.1% in a year and 15.1% a year over five.
- ASIA picks the 50 largest Asian tech companies, including Alibaba and Tencent, for 0.67%. It has the best 3-year record in this guide at 43.5% a year, but it is a pure sector bet.
- VAE is the broad version: hundreds of companies across Asia ex-Japan for 0.40%, with more banks and consumer companies.
- PAXX (Platinum, active) charges 1.10% and returned 14.7% last year, behind the index funds.
IAA and ASIA overlap by only about 36%. See IAA vs ASIA and IAA vs VAE.
Japan, Korea, China and India
| ETF | Market | Fee | Size | 1 year | 5 years (a year) |
|---|---|---|---|---|---|
| IJP iShares | Japan | 0.50% | $1.6bn | +19.3% | +9.2% |
| HJPN Betashares | Japan, hedged | 0.56% | $355m | +43.4% | +17.3% |
| IKO iShares | South Korea | 0.45% | $198m | +125.3% | +20.1% |
| IZZ iShares | China large-cap | 0.60% | $452m | −19.5% | +0.1% |
| CNEW VanEck | China new economy | 0.95% | $96m | −2.0% | −0.9% |
| CETF VanEck | China A-shares | 0.60% | $33m | −5.2% | −0.3% |
| NDIA Global X | India Nifty 50 | 0.69% | $166m | −17.2% | +0.3% |
| IIND Betashares | India quality | 0.80% | $160m | −16.9% | −1.1% |
Total returns to 30 September 2026. Source: TMX Australia monthly funds report.
- Japan has been a quiet achiever. The currency hedged HJPN more than doubled IJP's gain last year (+43.4% vs +19.3%), though the two also follow different indexes. Over five years HJPN returned 17.3% a year.
- Korea is really a bet on two companies: SK hynix and Samsung are 47% of IKO.
- China funds have gone nowhere over five years. IZZ is about 38% financials, mostly large state-linked banks, plus Alibaba and Tencent.
- India funds fell 17% last year and are slightly negative over three years. India's long-term growth story is popular, but the returns here have not followed recently.
What $10,000 grew to over five years
Risks to weigh
- Concentration. Many Asian funds are now a semiconductor bet in disguise. If the chip cycle turns, they will likely fall together.
- Politics. China's regulation, Taiwan's geopolitical position and trade tariffs can move these markets sharply.
- Currency. Almost all are unhedged, so currency swings add to the ride. See every currency hedged ETF.
- Higher fees. 0.25% to 1.20%, more than broad developed-market funds.
Where these funds can fit
Emerging markets make up roughly a tenth of world share markets. Many investors hold a small slice, often 5 to 10% of their shares, in one broad fund, rather than several country bets. A broad MSCI fund (IEM or BEMG) suits investors who want the full index including Korea; VGE suits those happy with FTSE's definition; country funds suit those with a specific view and the stomach for it.
For a plain-English walk through how emerging markets work, read how to access emerging markets. If the chip story interests you, the AI boom goes beyond NDQ covers SEMI and the rest of the AI supply chain. Browse the Asia, emerging markets, China, India and Japan pages for every fund.
Check how much VGE and IEM overlap →
Common questions
Is VGE or IEM better?
VGE is cheaper (0.48% vs 0.69%) and larger, but it excludes South Korea. IEM includes Korea, which is why it beat VGE by about 15 points over the past year and by about 2.4 points a year over five years. They are only about half the same.
What is the best China ETF in Australia?
None has done well lately. IZZ is the largest at $452 million but returned just 0.1% a year over five years. CNEW and CETF are slightly negative over five years. Broad EM or Asia funds give some China exposure with less concentration.
Which ETF gives exposure to India?
NDIA (Nifty 50, 0.69%) and IIND (India quality, 0.80%) are the largest. Both fell about 17% in the year to 30 September 2026. Broad funds like VGE and IEM also hold about 8 to 10% in India.
Does VGS include emerging markets?
No. VGS follows developed markets only. To add China, India, Taiwan or Korea you need a separate emerging markets or Asia ETF.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.