BlackRock's South Korea-Inclusive ETF Gains 38% in One Year, Vanguard's Emerging Market ETF Rises 20%

BlackRock's emerging market ETF that includes South Korea has outperformed Vanguard's emerging market ETF by approximately 20 percentage points over the past one year, with BlackRock's fund gaining around 38% compared to Vanguard's roughly 20% return. The performance gap is driven by South Korea's artificial intelligence semiconductor rally, led by Samsung Electronics and SK Hynix. The divergence stems from the two firms' different index classifications: BlackRock includes South Korea in its emerging market index, while Vanguard classifies South Korea as a developed market and excludes it from emerging market indices.

The AI chip strength in South Korea has thus created a significant performance gap between the two funds, with investors in BlackRock's emerging market exposure benefiting directly from the gains, while Vanguard investors in the same category missed the rally.