RIA Ideas - Revenge of the Emerging Markets
Participation Note — EEM
Emerging markets are up 22% this year. Many clients have little to no exposure.
EEM — the broadest emerging markets ETF — is up +22.0% YTD vs the S&P 500’s +11.0% (as of 5/31/2026, Yahoo Finance). It trades at 18.6x trailing P/E against the S&P at 28.4x — a nearly 10-point valuation discount, despite outperforming by double this year.
EM exposure tends to be systematically underweighted in RIA client portfolios — the volatility and headline risk keep most advisors away. A structured note may offer a way to revisit that. If EEM is up in year one, clients may walk away with a 15% fixed return in 12 months. If not, the note continues — and clients may receive 150% of EEM’s total gain at the five-year maturity. Two potential outcomes, both on the right side of the trade.
EEM vs. S&P 500 — YTD Performance & Valuation
Yahoo Finance, as of 5/31/2026 · BlackRock / MSCI (2025) · marinelayeradvisors.com/insights
One Way to Express a Constructive View
5-Year EEM Participation Note
15% Year-1 Call · 150% Upside
If EEM closes positive at the end of year one, the note may call and pay a 15% fixed return. If not called, clients may receive 150% of EEM’s total gain at the five-year maturity. A 70% European barrier means principal may be at risk only if EEM closes below 70% of its starting level at maturity.
Indicative levels only.
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This material is for informational purposes only and does not constitute a recommendation. Data sourced from Yahoo Finance and has not been independently verified. Past performance is not indicative of future results. Structured notes involve risks including potential loss of principal.
