MSCI Emerging Markets (NYSEArca: EEM - News) are both up 14.9% year to date, compared with a 7.4% gain for SPDR S&P 500 (NYSEArca: SPY - News). The emerging market ETFs track the same MSCI index. [Emerging Market ETFs Reemerging?]

VWO led all ETFs in January with net inflows of $3.2 billion, while EEM gathered $1.3 billion, the Financial Times reports. This after U.S. investors pulled $2.4 billion from emerging markets ETFs in 2011.

“Geoffrey Dennis, emerging markets strategist at Citigroup, says emerging markets could rise 25% to 30% over 2012,” the FT reports. “As well as highlighting attractive valuations, Dennis says falling inflation and lower interest rates will provide support for emerging markets in 2012.”

The two emerging market funds are the most popular ETFs this year. [Investors Tapping ETFs to Position for Higher Markets]

Some analysts are starting to wonder whether emerging markets deserve higher multiples relative to developed countries due to faster growth, lower debts and better demographics. [Emerging Market ETFs Could Rally More on Economy, Valuations]

iShares MSCI Emerging Markets

Full disclosure: Tom Lydon’s clients own VWO and SPY.