Invesco's $1.7 Billion Emerging Markets Fund Rides China Tech and Banks To Huge Gains

"The Invesco RAFI Emerging Markets ETF ( NYSEARCA:PXH) has delivered exceptional returns, surging 42% over the past year to reach $28.10 as of January 27, 2026. This performance significantly outpaced the S&P 500's 16% gain and slightly edged out the iShares MSCI Emerging Markets ETF ( NYSEARCA:EEM) with its 46% return. The rally reflects renewed appetite for emerging markets exposure as investors position for a potential shift away from US equities after years of domestic market dominance."

"PXH's performance lives and dies by China, where the fund maintains heavy exposure across financials and technology. State-owned banks collectively represent over 6% of holdings, creating direct exposure to Beijing's credit policies and economic management. The technology allocation centers on Tencent ( OTCMKTS:TCEHY) at 3.00% of the portfolio, positioning investors to benefit from China's digital economy recovery. The critical macro factor to watch is China's economic stabilization trajectory."

The Invesco RAFI Emerging Markets ETF (PXH) rose 42% to $28.10 as of January 27, 2026, materially outpacing broader US equities. The fund holds $1.7 billion in assets and uses a fundamentally weighted methodology that emphasizes value, producing a 2.15% dividend yield. China represents the primary risk and return driver, with heavy exposure to financials and technology; state-owned banks exceed 6% and Tencent comprises 3.00% of the portfolio. Macroeconomic stabilization in China and the sustainability of Beijing stimulus measures will determine the trajectory, with industrial production and retail sales as key indicators. Earnings divergence among holdings is a notable micro risk, exemplified by JD.com's recent 57% earnings compression and its Q4 2025 report due March 9.

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