3 Best Emerging Markets ETFs in Canada (June 2026)
The best emerging markets ETFs in Canada include VEE.TO (~0.24% MER), XEC.TO (~0.26%), and ZEM.TO (~0.27%). These ETFs provide exposure to developing economies like China and India, offering higher growth potential but with increased volatility, geopolitical risk, and currency fluctuations.
Emerging markets ETFs are designed for Canadian investors seeking higher growth potential by investing in developing economies such as China, India, Brazil, and Southeast Asia. ETFs like VEE.TO, XEC.TO, and ZEM.TO provide exposure to fast-growing regions that can outperform developed markets over the long term.
The key advantage of emerging markets ETFs is growth potential driven by expanding economies and populations. However, these markets come with higher volatility, political risk, and currency fluctuations.
In this guide, we break down the best emerging markets ETFs in Canada, comparing diversification, fees, and risk so you can decide how they fit into your TFSA, RRSP, or global portfolio.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top VEE.TO Vanguard FTSE Emerging Markets All Cap Index ETF | — | $4.3B | 1.94% | +14.93% | +27.36% |
XEC.TO iShares Core MSCI Emerging Markets IMI Index ETF | — | $4.5B | 1.54% | +29.77% | +46.26% |
ZEM.TO BMO MSCI Emerging Markets Index ETF | — | $3.5B | 1.78% | +31.95% | +49.55% |
What Is an ETF?
An emerging markets ETF in Canada is an exchange-traded fund that invests in stocks from developing countries such as China, India, Brazil, and other rapidly growing economies. These ETFs provide exposure to higher-growth regions outside of developed markets.
For example, VEE.TO (~0.24% MER) tracks the FTSE Emerging Markets Index with broad diversification. XEC.TO (~0.26% MER) provides similar exposure with a slightly different weighting approach, while ZEM.TO (~0.27% MER) focuses on large- and mid-cap emerging market companies. XEM.TO is another widely used option with global emerging markets exposure.
Emerging markets ETFs are typically used in TFSAs and RRSPs as a growth component. Investors should consider volatility, geopolitical risk, and currency exposure when allocating to this asset class.
The 3 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
Vanguard FTSE Emerging Markets All Cap Index ETF
$52.12
+14.93% YTD
Returns
YTD
+14.93%
1Y
+27.36%
3Y
+17.90%
5Y
+7.31%
iShares Core MSCI Emerging Markets IMI Index ETF
$47.88
+29.77% YTD
Returns
YTD
+29.77%
1Y
+46.26%
3Y
+23.45%
5Y
+9.79%
BMO MSCI Emerging Markets Index ETF
$36.47
+31.95% YTD
The BMO MSCI Emerging Markets Index ETF has been designed to replicate, to the extent possible, the performance of the MSCI Emerging Markets Index, net of expenses. The Fund invests in emerging markets equity. The Manager may use a sampling methodology in selecting investments for the Fund. The Fund may also invest in or hold securities intended to replicate the performance of the Index. In addition, as ZEM may hold other underlying ETFs, the management fees charged are reduced by the management fees paid on the underlying ETFs.
Returns
YTD
+31.95%
1Y
+49.55%
3Y
+23.87%
5Y
+9.65%
Pros & Cons
Pros
- High growth potential from rapidly developing economies
- Diversifies beyond developed markets and Canada
- Exposure to large populations and expanding middle-class consumption
- Can enhance long-term portfolio returns
Cons
- Higher volatility compared to developed market ETFs
- Political and regulatory risks in certain countries
- Currency fluctuations can significantly impact returns
- Market concentration in countries like China and India
Compare These ETFs Head-to-Head
Drill into a side-by-side breakdown of performance, AUM, and yield.
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Frequently Asked Questions
What is the best emerging markets ETF in Canada?
VEE.TO is one of the most popular emerging markets ETFs in Canada due to its broad diversification and competitive ~0.24% MER. Alternatives like XEC.TO and ZEM.TO offer similar exposure with slightly different country weightings and structures.
Are emerging markets ETFs risky?
Yes, emerging markets ETFs are generally more volatile than developed market ETFs. They are exposed to political instability, currency fluctuations, and economic uncertainty, but they also offer higher long-term growth potential.
Should I include emerging markets in my portfolio?
Many investors include a small allocation to emerging markets ETFs to boost growth and diversification. The exact allocation depends on your risk tolerance, but they are typically used as a complement to developed market and Canadian equities.