Core Insights - The article discusses the rising popularity of emerging markets ETFs that exclude China, driven by geopolitical concerns and changing investor preferences [1][5][6] - Vanguard launched the Vanguard Emerging Markets ex-China ETF (VEXC), which aims to provide exposure to emerging markets while avoiding Chinese stocks [1][5] - Despite the appeal of these ex-China ETFs, performance has been mixed, with many underperforming compared to broader emerging market ETFs [6][7] ETF Performance and Trends - In 2024, there was significant demand for ex-China ETFs, with iShares MSCI Emerging Markets ex China ETF attracting $6.7 billion in inflows last year, but experiencing $5.4 billion in outflows this year [3] - The iShares Core MSCI Emerging Markets ETF has a 27% allocation to Chinese stocks, while ex-China ETFs like EMXC and VEXC offer lower exposure [4][5] - The Freedom 100 Emerging Markets ETF (FRDM) stands out with a 37.4% increase this year, focusing on countries with strong political and economic freedom, and excluding China [8] Fee Structures and Investor Strategies - Vanguard's VEXC charges a low fee of 0.07%, significantly lower than the 0.25% charged by iShares MSCI Emerging Markets ex China ETF [5] - Investors are using combinations of ETFs to manage their exposure to China, pairing broader emerging market ETFs with ex-China options for a balanced approach [5][6] - The article highlights the performance of various ex-China ETFs, with the Freedom 100 ETF outperforming others, while most lag behind broader emerging market indices [6][8][10]