Earlier this month, the Chinese e-commerce giant Alibaba reported a massive surge in its fourth-quarter revenue, results that contributed to the strong year-to-date advance in its stock price. The Vanguard funds are among the most popular way for investors to get exposure to the emerging-market sector.

The Vanguard Emerging Markets Stock Index Fund VEIEX, Index funds like these simply track an underlying benchmark, holding whatever the index does, and in the same proportion. In contrast, actively managed funds have their components chosen by an individual or team.

However, the Vanguard and iShares funds track benchmarks from different index providers, who use their own unique process and criteria for determining the holdings of the index. Read more about index funds here. The two funds share seven of their top 10 holdings, albeit in different proportions, but the differences in holdings mean they have posted materially different performances thus far this year. The Vanguard fund is up This divergence can largely be attributed to Alibaba, which is up Baidu is up about Sina has surged This firm is a small, mid, large and megacap company, according to Vanguard.

These ETFs are betting on a consumer boom in emerging markets. According to Carter, Alibaba and Baidu were excluded from the FTSE index — and thus, the Vanguard funds — because their primary listing is on a U.

While Alibaba is headquartered in China and trades on U. Ryan Vlastelica is a markets reporter for MarketWatch and is based in New York.

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