<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>International stocks are seeing massive inflows this year. </li><li>The SPEM ETF has outperformed ETFs that track the S&amp;P 500 and the Russell 3000. </li><li>Investing in emerging markets and international stocks can be a key portfolio diversifier. </li><li>10 stocks we like better than State Street SPDR Portfolio Emerging Markets ETF ›</li></ul>So far in 2026, there has been increasing interest in international and emerging-market stocks and exchange-traded funds (ETFs). According to research from Bank of America earlier this year, four times more money is flowing into international stocks than U.S. stocks.There are several reasons, but mainly it is a sign of investors diversifying away from U.S. equities, mainly large-cap stocks, which have generally become overvalued after a three-year bull market. Also, international and emerging market stocks are benefiting from a weaker dollar, favorable monetary policy, and a surge in infrastructure investments, as well as the broadening artificial intelligence (AI) boom, among other reasons.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NjAzNC9nZXR0eWltYWdlcy0yMTk3NjU1MzQ5LmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NjAzNC9nZXR0eWltYWdlcy0yMTk3NjU1MzQ5LmpwZyZ3PTcwMA"/>Image source: Getty Images. Diversification is always important, but it is taking on even greater significance now, particularly for those investors whose portfolios got top-heavy with large-cap U.S. growth stocks during the bull market. That means it makes sense to diversify with both international stocks and ETFs investing in companies in developed nations, as well as those from emerging markets.One great way to tap into emerging markets is through the State Street SPDR Portfolio Emerging Markets ETF (NYSEMKT: SPEM).<h2>Covering the gamut of emerging markets</h2>The State Street SPDR Portfolio Emerging Markets ETF provides investors with access to a gamut of emerging-market stocks, with roughly 3,000 holdings.It tracks the S&amp;P Emerging BMI Index, which offers broad exposure to emerging-market stocks. And by broad, I mean all of them -- the investable universe of emerging markets across large, mid, and small caps.As I write this, the ETF holds 2,983 stocks from 30 different emerging markets. About 29% of the portfolio is made up of stocks from China, while 28% are from Taiwan and 16% are from India. Stocks from Brazil make up 5%, while South Africa and Saudi Arabia account for 3% of the portfolio each. Technology is the largest sector, making up 28% of the ETF, followed by financials at 21% and consumer discretionary stocks at 10%.The top three holdings are Taiwan Semiconductor, Tencent Holdings from China, and Alibaba Group, also from China.<h2>Beating the S&amp;P 500 and Russell 3000</h2>SPEM has returned 9% year to date, which tops the S&amp;P 500 and the broad market Russell 3000. Over the past year, it has returned 30%. It hasnʻt performed as well as its U.S. counterparts over the past five- and 10-year periods, but those have been strong cycles for U.S. stocks. Markets go in cycles, and some experts, including some at Vanguard, expect international stocks to outperform U.S. stocks over the next decade, making diversifying with emerging markets critical. With its broad exposure, this ETF is a solid option for investors who donʻt have an intimate knowledge of emerging markets but are looking to diversify. You don't have to take a major position, but even a small allocation to an emerging-market ETF like this can provide good balance against volatile U.S. markets.<h2>Should you buy stock in State Street SPDR Portfolio Emerging Markets ETF right now?</h2> Before you buy stock in State Street SPDR Portfolio Emerging Markets ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and State Street SPDR Portfolio Emerging Markets ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,797!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,282,815!* Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 200% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 30, 2026. Bank of America is an advertising partner of Motley Fool Money. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing and Tencent. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

SPEM

BABX

KBAB

The State Street SPDR Portfolio Emerging Markets ETF (SPEM) tracks approximately 3,000 holdings across various emerging markets, including China, India, and Brazil. It has outperformed major U.S. indices, returning 9% year-to-date and 30% over the past year. With increasing inflows into international stocks, SPEM offers a diversification opportunity for investors looking to balance their portfolios against U.S. market volatility. The ETF's top holdings include Taiwan Semiconductor, Tencent, and Alibaba, and it is recommended for those seeking exposure to emerging markets without extensive knowledge of the sector.

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SPDR Em Mkt

BABA 2x Long Daily ETF - GraniteShares

KraneShares 2x Long BABA Daily ETF

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Bank of America

NVIDIA

Intel

Taiwan Semiconductor

TENCENT

Tencent

Alibaba

BABA-W

Netflix

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Bank of America Corp

NVIDIA Corporation

TENCENT-R

Tencent HK SDR 10to1

Tencent Holdings Limited

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Alibaba HK SDR 5to1

SPEM Tracks 3,000 Holdings Across China, India, Brazil, South Africa, Mexico, and Other Countries. Here Is Why a Small Emerging-Markets Allocation Could Pay Off for Patient Investors