Analysis of Vanguard's Emerging Markets ex-China ETF (VEXC) Launch and Market Impact

This analysis is based on the Fox Business report [1] published on November 26, 2025, covering Vanguard’s Emerging Markets ex-China ETF (VEXC) launch and market traction.

Vanguard launched the Emerging Markets ex-China ETF (VEXC) in September 2025 to provide exposure to emerging markets excluding China, tracking the FTSE Emerging ex China Index [1]. The ETF includes over 1,000 companies from markets like Brazil, India, and Taiwan—with top holdings including Taiwan Semiconductor (TSM) and Infosys (INFY) [1]. As of November 26, VEXC has ~$47.7M AUM, average daily volume of ~16k shares, and a real-time price of $77.80 (+1.08% intraday) [0].

Market movements on the event day show:

• VEXC up 1.08%
• EMXC (iShares ex China ETF) up1.15% ($12.87B AUM)
• MCHI (China ETF) down0.17% [0].

The FTSE Emerging ex China Index (VEXC’s benchmark) is up26% YTD [1], indicating strong performance of non-China EM markets.

1. Investor Sentiment Shift
   : The positive performance of VEXC and EMXC vs MCHI’s decline reflects growing investor interest in avoiding China-related risks (geopolitical, regulatory) [0,1].
2. Non-China EM Outperformance
   : The benchmark index’s26% YTD gain highlights that non-China EM markets are outperforming many China-included indices [1].
3. Early Traction
   : VEXC’s AUM approaching $50M shows initial adoption, though it lags established competitors like EMXC (12.87B AUM) [0].
4. Diversification Trend
   : The launch of VEXC aligns with a broader trend of asset managers offering ex-China EM products to meet investor demand [1].

• Liquidity Risk
  : VEXC’s low average volume (~16k shares) may lead to wider bid-ask spreads for large trades [0].
• Performance Lag
  : VEXC’s4% return since launch trails its benchmark’s4.9% [1].
• Opportunity Cost
  : Excluding China could mean missing growth if its economy rebounds (MCHI’s P/E of13.75x is lower than VEXC’s15.19x) [0].

• Diversification
  : VEXC provides exposure to high-growth EM markets (India, Taiwan, Brazil) without China exposure [1].
• Trend Alignment
  : Investors can capitalize on the non-China EM outperformance trend [0,1].

• VEXC Metrics
  : Price $77.80, AUM $47.7M, volume ~16k shares,4% return since launch [0,1].
• Market Context
  : EMXC (12.87B AUM) is the leading non-China EM ETF; FTSE index YTD up26% [0,1].
• Sentiment
  : Mixed—positive for non-China EM, negative for China-focused products [0].