For most of the past decade, it has been easy to focus on the US market. Large-cap American tech stocks have dominated returns and drawn most of the attention.
But heading into 2026, I find myself increasingly interested in emerging markets.
VanEck’s latest research highlights that last year marked the strongest annual performance for emerging market equities since 2017, as measured by the MSCI Emerging Markets Index. More importantly, the drivers behind that strength may not be finished.
Rather than trying to pick individual stocks across unfamiliar markets, I would prefer to use ASX-listed exchange-traded funds (ETFs) to gain exposure. Two that stand out are the VanEck India Growth Leaders ETF (ASX: GRIN) and the VanEck MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT).
Here is why I think they are worth a closer look.
A weaker US dollar could help
One of the more interesting points in VanEck’s research is the historical relationship between US dollar weakness and emerging market outperformance.
If the US dollar continues to soften, as some expect due to slowing growth and monetary easing, that could provide a meaningful tailwind for emerging markets. Historically, weaker dollar cycles have tended to persist once underway.
For me, that macro backdrop makes emerging markets more attractive than they have been in recent years.
Growth and valuation both matter
Another reason I’m paying attention is the growth differential.
VanEck highlights that emerging economies continue to grow at nearly double the pace of developed markets. At the same time, analysts are pricing in around 20% earnings-per-share growth in the short to medium term.
What makes that more compelling is valuation. Emerging markets are trading at roughly a 25% relative discount to developed markets.
Stronger growth and cheaper valuations do not guarantee outperformance, but they are a combination I find hard to ignore.
Why I’d consider the EMKT ETF
The VanEck MSCI Multifactor Emerging Markets Equity ETF appeals to me because it is not just a broad index tracker.
It applies a four-factor framework, selecting companies based on value, momentum, low size, and quality. VanEck notes that these combined factors have demonstrated long-term outperformance relative to the broader MSCI Emerging Markets Index.
If I want diversified emerging market exposure but with a systematic tilt toward companies with stronger characteristics, the EMKT ETF looks like a sensible starting point.
Why I’m interested in the GRIN ETF
India, in particular, stands out to me. VanEck describes India as a key market to watch in 2026, noting that much of the volatility in 2025 was driven by sentiment rather than structural deterioration. Strong GDP and earnings growth, alongside easing policy, reinforce India’s potential to re-emerge as a standout performer.
The VanEck India Growth Leaders ETF focuses on 50 fundamentally sound Indian stocks with attractive growth characteristics.
If I want more targeted exposure to India’s long-term structural growth story, the GRIN ETF provides that focus in a single trade.
How I’d think about using them
Emerging markets are volatile. I would not treat either ETF as a defensive holding.
Instead, I would see the EMKT ETF as a diversified way to gain broad exposure to emerging economies, and the GRIN ETF as a higher-conviction allocation to India specifically.
Both would sit alongside developed market exposure rather than replace it.
Foolish takeaway
After years of US dominance, I think emerging markets deserve another look.
A weaker US dollar, stronger relative growth, and discounted valuations create a more favourable setup than we have seen in some time.
For investors willing to accept higher volatility in pursuit of higher growth, the EMKT ETF and the GRIN ETF are two ASX ETFs I would consider as part of a long-term portfolio in 2026.
The post Why I think these ASX ETFs are buys in 2026 appeared first on The Motley Fool Australia.
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.