WisdomTree launches the True Emerging Markets UCITS ETF: a new approach to emerging markets

The WEM ETF debuts today on the LSE with a TER of 0.25%, excluding China, South Korea and Taiwan to focus on truly emerging economies

WisdomTree today launched the True Emerging Markets UCITS ETF (ticker WEM, ISIN IE000Q1M7HB8) on the London Stock Exchange, a product that offers an operational redefinition of the emerging markets universe.

The fund tracks the proprietary WisdomTree True Emerging Markets UCITS Index with a Total Expense Ratio of 0.25% and stands out for a selection criterion that systematically excludes three markets traditionally included in emerging market benchmarks: China, South Korea and Taiwan.

The problem with traditional benchmarks

The MSCI Emerging Markets Index — the industry’s most widely followed benchmark — shows extreme concentration: China (25.5%), Taiwan (22.5%) and South Korea (15.5%) together account for over 63% of the basket. This concentration has turned exposure to emerging markets into a bet on three Asian economies, two of which (Korea and Taiwan) are classified by the IMF as ‘high-income’ and no longer emerging in the economic sense of the term.

WisdomTree addresses this issue through a proprietary multi-parameter framework that analyses: the IMF’s World Economic Outlook classification, GDP per capita, the United Nations Human Development Index, sovereign ratings, GDP growth dynamics and the accessibility of the local stock market.

The countries in the basket

The ETF offers exposure to markets characterised by favourable demographics, digital progress and low capital market penetration. Key countries include India, Brazil, Saudi Arabia, Mexico, South Africa, Indonesia, Vietnam, Thailand, Poland, Turkey, the Philippines, Chile, Malaysia, Hungary, the Czech Republic, Argentina, Kuwait, Qatar, the United Arab Emirates and Peru.

According to data from the US UCITS twin fund (XC), the geographical breakdown shows India in first place, followed by Mexico, Brazil, South Africa and Saudi Arabia.

Pierre Debru, Head of Research Europe at WisdomTree, explains the rationale behind the product: “Emerging markets investing is fundamentally about capturing the growth potential that arises as economies transition from lower to middle-income status. This development process is typically supported by rising productivity, expanding domestic demand, improving institutions, and deepening capital markets. This innovative strategy is designed to restore that original intent by focusing on countries where rising incomes, structural change and capital market deepening are still powerful drivers of long-term returns.”

Alexis Marinof, WisdomTree’s CEO for Europe (appointed in February 2025 after leading the European division since 2019), adds: “When launching new products, our intention is to deliver investment solutions that solve real portfolio challenges. This launch offers investors a more deliberate way to access emerging market growth, one that aligns more closely with the original rationale for EM investing and complements broader global equity allocations in a disciplined and transparent way.”

WisdomTree’s operating environment

The launch comes as WisdomTree is experiencing a phase of significant expansion in Europe. As of February 2026, European AUM stood at approximately $61.8 billion, with an annualised organic growth rate exceeding 100% for the UCITS range. Globally, the firm manages approximately $156.5 billion.

The group recently announced the acquisition of Atlantic House Holdings to expand its capabilities in defined-outcome products and derivatives, confirming a growth strategy driven by both external and internal initiatives.

Investment considerations

The product occupies a specific niche in the European market. Currently, most emerging market ETFs listed in Europe track MSCI or FTSE benchmarks that include China, Taiwan and Korea. The exclusion of these three markets reduces correlation with Asian technology cycles (Taiwan and Korea are dominated by semiconductors and electronics) and with risks specific to the Chinese market, but increases exposure to economies with lower liquidity and greater macroeconomic volatility.

India, which accounts for around 12.6% of the standard MSCI EM index, becomes the dominant holding in the WisdomTree basket, followed by Latin American markets (Brazil, Mexico) and the Middle East (Saudi Arabia, Kuwait, Qatar, UAE).