Global markets are showing distinct performance divergences in 2026. Country-specific ETFs reflect this trend, indicating a fragmented market environment. Some nations exhibit strong gains, while others face declines. This suggests a period of varied global market performance.

Country ETF Tracker data supports this observation. As of February 25, 2026, certain countries have delivered notable returns, while others have experienced pullbacks. This highlights the importance of detailed geographic analysis. The broad market, represented by SPY, posted a +1.65% YTD gain, serving as a comparative benchmark.

Top Performing Country ETFs: Q1 2026 Leaders

South Korea (EWY) recorded the highest YTD return at +53.15% as of February 25, 2026. This performance indicates strong market momentum within the South Korean economy. Peru (EPU) followed with gains of +29.05%. Thailand (THD) rose +25.05%, and Brazil (EWZ) achieved a +24.61% return. Taiwan (EWT) completed the top five with a +21.30% gain. These performances exceed the broader market's return, suggesting country-specific strengths.

Underperforming Country ETFs: Areas of Weakness

Conversely, some country ETFs did not experience positive momentum. Denmark (EDEN) showed the weakest performance, with a -5.37% YTD decline. Kuwait (KWT) also declined by -3.76%. Indonesia (EIDO) and India (INDA) registered losses of -2.57% and -2.42%, respectively. These figures contrast with the top performers, indicating countries facing economic or market challenges.

Key Drivers and Catalysts: Unpacking Country Performance

The significant dispersion in country ETF performance is driven by a complex interplay of global and local factors.

South Korea (EWY)'s exceptional +53.15% YTD rally is largely attributed to a global memory chip shortage. This has propelled major memory producers like Samsung Electronics and SK Hynix. The rising demand for AI infrastructure fuels booming orders for these chip manufacturers, positioning South Korea as a key beneficiary of the global AI boom.

Latin American markets like Brazil (EWZ) and Peru (EPU) are benefiting from a broader commodity rally. Peru's market is highly sensitive to metal prices, with gold trading above $5,000 per ounce and silver around $90 per ounce. Brazil, while also benefiting from commodities, possesses a more diversified economy, which provides additional resilience.

The United States (SPY), despite its modest +1.65% YTD gain, is generally lagging compared to top country performers. The S&P 500 index carries a heavy concentration in tech giants, with the "Magnificent 7" holding over 30% weight. However, their rally has decelerated in 2026. Investor concerns regarding potential overspending and elevated software valuations have contributed to a flat performance in the broader tech sector.

Denmark (EDEN)'s -5.37% YTD decline is significantly impacted by the performance of its heavyweight pharmaceutical company, Novo Nordisk. Shares of Novo Nordisk have experienced substantial negative price action, falling more than 25% year-to-date in 2026, following a 40% drop in 2025. This downturn stems from a weak 2026 outlook, intense competition from rivals like Eli Lilly (whose drug outperformed Novo Nordisk's next-generation weight loss treatment, CagriSema, in trials), and pricing pressures in the crucial U.S. market. The company also anticipates market share losses and required price reductions.

Investors can find deeper insights into these drivers on Country ETF Tracker's dedicated country pages. For further analysis and live trend tracking, visit the Country ETF Tracker homepage. Explore our comparison tools to evaluate portfolios, or review specific country data for India (INDA), Indonesia (EIDO), or Brazil (EWZ).