The performance of the U.S. stock market has been solid so far in 2026. After being down as much as 7% through late March, the S&P 500 Index has rebounded sharply. Overall, the index’s total return on the year sits near 10%. From 2015 to 2025, the index’s average annual return was approximately 14.5%. Thus, the S&P 500 will need a strong back half of the year to meet or eclipse this figure.
Despite providing investors with solid returns, the U.S. has been far from the best geography to invest in during 2026. Two Asian stock markets have stood far above all others this year, delivering gains of 50% or more.
Unsurprisingly, the artificial intelligence (AI) trade is driving these countries' success. Here are the ETFs that provide direct exposure and the factors to monitor going forward.
EWT Soars as TSMC and Other AI Players Put Up Large Gains
Taiwan is home to the world's second best-performing stock market in 2026, and one of the most common ways to gain exposure is the iShares MSCI Taiwan ETF (NYSEARCA: EWT). The fund’s return sits near 50% for the year.
EWT’s anchor holding is none other than the Taiwanese shares of Taiwan Semiconductor Manufacturing (NYSE: TSM), the world’s dominant force in advanced chip fabrication.
TSMC accounts for a massive portion of EWT, with a weighting near 22%. With this, and TSMC’s Taiwanese shares up about 50% in 2026, the stock has been by far the largest contributor to EWT’s return.
TSMC has had a very strong year, recently posting its fifth consecutive quarter of record revenue and profits.
The company also greatly increased its 2026 growth guidance from more than 30% to more than 40% in U.S. dollar terms.
It also significantly increased its capital expenditure (CapEx) guidance and is planning an additional $100 billion investment in Arizona to build manufacturing sites. This brings the company’s total commitment in Arizona to a whopping $265 billion. These investments signal a high degree of confidence in the firm’s long-term demand.
TSMC is far from the only Taiwanese stock putting up big-time gains in 2026. In fact, more than 10 stocks in EWT are up over 100% this year. This includes MediaTek (OTCMKTS: MDTKF), whose Taiwanese shares are up approximately 140%, and EWT’s second largest weighting at around 6%. Reports indicate that MediaTek has played a role in developing Alphabet’s (NASDAQ: GOOGL) tensor processing units (TPUs). This is a large opportunity for MediaTek, given that Broadcom (NASDAQ: AVGO) has grown its AI chip business largely through its huge partnership with Alphabet.
South Korea Takes the Cake as Memory Makers Skyrocket
So far this year, South Korea has been the world’s best-performing stock market. The iShares MSCI South Korea ETF (NYSEARCA: EWY) is one of the primary avenues for gaining exposure to South Korea. The fund has delivered a highly impressive return of over 70% in 2026. This comes even as it is down more than 20% from its highs.
Local shares of memory chip makers SK hynix (NASDAQ: SKHY) and Samsung Electronics (OTCMKTS: SSNLF) account for an overwhelming percentage of the fund. Together, their weighting is around 45%, with SK hynix being 23% and Samsung 22%. Their South Korean shares are up more than 150% and approximately 100%, respectively.
The intense memory chip shortage has driven massive returns in these stocks. This comes as AI customers look to buy up all available high-bandwidth memory (HBM), dynamic random-access memory (DRAM), and solid-state drives (SSDs).
This has led to exponential revenue growth and margin expansion. For example, in Q1, SK Hynix’s revenue rose 198% year-over-year, in terms of Korean won.
In just one quarter, gross margin increased 1,000 basis points to 79%, and operating margin rose 1,400 basis points to 72%.
This comes as SK hynix says average selling prices (ASPs) for its DRAM products rose in the mid-60% range quarter over quarter.
Americans can also now easily invest in SK hynix through the firm’s recently released American depositary receipts (ADRs). However, one risk with this approach is that the company’s ADRs have traded at a massive premium to its South Korean shares. Recently, this premium fell to 24.6%, down from 51%. In other words, U.S. investors are paying much more for a company with the same underlying value. This premium could continue to compress significantly over time, pressuring the ADRs.
What to Watch: CapEx, China-Taiwan Relations, Memory Margins
When it comes to EWT, hyperscaler CapEx spending and guidance will be key to watch going forward. Growth in these numbers will support TSMC’s ability to continue growing its revenue, as well as that of many of the other smaller players in EWT. It is also worth watching how significant MediaTek’s relationship with Alphabet becomes, and what type of sales growth it translates into. Furthermore, investors should monitor signs of aggression from China against Taiwan and the U.S. government’s response.
Big Tech CapEx is a key signal for EWY. Further increases in memory pricing and memory maker margins would also indicate that these companies continue to leverage the shortage to improve financial performance. It is also worth paying attention to how the premium in SK hynix’s ADRs shifts over time.
The article "2 ETFs to Access the World's Best-Performing Stock Markets In 2026" first appeared on MarketBeat.
