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A Safe and Effective Investment in Emerging Markets

The iShares Core MSCI Emerging Market ETF (IEMG) is an exchange-traded fund (ETF) that offers investors a chance to invest broadly in emerging markets as a whole rather than take the heightened risk of buying into a specific sector or country.

This broad-market approach involves IEMG tracking the investment results of an index that consists of all types of emerging market equities — large-, mid- and small-cap companies from around the globe that are all included in this fund. Founded in 2012, IEMG originally was viewed as a cost-effective alternative to the main emerging market benchmark ETF, the iShares MSCI Emerging Markets (EEM).

IEMG is only half the size of EEM, which has a giant market cap of $30 billion. Even so, IEMG has attracted a lot of attention in the four years since its inception and currently boasts year-to-date fund flows of almost $5 billion. One possible explanation for IEMG’s quick growth in funds under management could be its lower annual fees compared to its bigger rival. EEM charges an annual fee of 0.71%, whereas IEMG charges investors just 0.16% annually.

In terms of asset allocation, IEMG is invested almost entirely outside of the United States, with 72% of its portfolio in Asian stocks. Europe and South America account for a combined 27% of the remaining portfolio.

Despite the turbulence of global markets this year, IEMG has a respectable year-to-date return of 16.9%. This isn’t the strongest return among emerging markets thus far this year, but it still is impressive since emerging markets as a whole are more resistant to extreme price swings than individual sectors or countries. Investors in this fund can expect an expense ratio of 0.16% and a 2.1% dividend yield.

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Expert Doug Fabian shows how investment in emerging markets, usually seen as a volatile bet, can be made much safer by choosing this fund.

archive

A Safe and Effective Investment in Emerging Markets

Expert Doug Fabian shows how investment in emerging markets, usually seen as a volatile bet, can be made much safer by choosing this fund.

The iShares Core MSCI Emerging Market ETF (IEMG) is an exchange-traded fund (ETF) that offers investors a chance to invest broadly in emerging markets as a whole rather than take the heightened risk of buying into a specific sector or country.

This broad-market approach involves IEMG tracking the investment results of an index that consists of all types of emerging market equities — large-, mid- and small-cap companies from around the globe that are all included in this fund. Founded in 2012, IEMG originally was viewed as a cost-effective alternative to the main emerging market benchmark ETF, the iShares MSCI Emerging Markets (EEM).

IEMG is only half the size of EEM, which has a giant market cap of $30 billion. Even so, IEMG has attracted a lot of attention in the four years since its inception and currently boasts year-to-date fund flows of almost $5 billion. One possible explanation for IEMG??s quick growth in funds under management could be its lower annual fees compared to its bigger rival. EEM charges an annual fee of 0.71%, whereas IEMG charges investors just 0.16% annually.

In terms of asset allocation, IEMG is invested almost entirely outside of the United States, with 72% of its portfolio in Asian stocks. Europe and South America account for a combined 27% of the remaining portfolio.

Despite the turbulence of global markets this year, IEMG has a respectable year-to-date return of 16.9%. This isn??t the strongest return among emerging markets thus far this year, but it still is impressive since emerging markets as a whole are more resistant to extreme price swings than individual sectors or countries. Investors in this fund can expect an expense ratio of 0.16% and a 2.1% dividend yield.

—————————————————–

To read the the rest of this article, click here.

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Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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