ETF Talk: This Fund is the ‘Core’ of Emerging Market ETFs

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

The iShares Core MSCI Emerging Markets ETF (IEMG) tracks a market-cap-weighted index of emerging market firms that cover 99% of market capitalization.

The fund seeks investment results that correspond to the price and yield performance of the MSCI Emerging Markets Investable Market Index. The underlying index is designed to measure large-, mid- and small-cap equity market performance in global emerging markets.

IEMG offers outstanding coverage of emerging markets in a low-priced and highly liquid package. As part of the line of “Core” exchange-traded funds (ETFs) from BlackRock, it offers very similar, but more comprehensive exposure than its sister fund EEM, another emerging markets ETF. IEMG includes smaller firms in its portfolio than EEM. IEMG is also far cheaper to hold than EEM shares. Since the fund’s 2012 launch, IEMG has attained a huge asset base and very deep liquidity.

The top IEMG sectors include financial services, technology, consumer cyclical, basic materials and energy. Among the fund’s top five holdings, 20.26% are in Tencent Holdings Ltd. (OTCMKTS: TCEHY), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM), Alibaba Group Holding Ltd. (NYSE: BABA), Samsung Electronics Co. Ltd. (OTCMKTS: SSNLF) and Naspers Limited Class N (OTCMKTS: NPSNY).

A regional review shows that IEMG’s top holdings are 74.11% in Asia, 11.36% in Latin America, 7.7% in the Middle East and Africa and 6.18% in Europe. Within Asia, the fund’s holdings are 21.91% in Hong Kong, 14.52% in South Korea, 12.19% in Taiwan and 9.61% in India.

The ETF currently has $49.95 billion in net assets and an average 0.02% spread, which is the difference between the bid and asking prices of a security. It has an expense ratio of 0.14%, so it is relatively cheap to hold in comparison to other exchange-traded funds.

Exclusive  GLOBAL STOCK INVESTOR HOTLINE UPDATE 55

To sum up, long-term investors who are looking for cheap, liquid and comprehensive exposure to emerging markets should consider this fund. It is also a good way to add international diversity to a portfolio. As always, investors should exercise their due diligence in deciding whether or not IEMG is a worthwhile investment, based on their personal needs.

I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE


img
previous article

Jim Woods discusses the best articles that he wrote over the course of 2018.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE