iShares MSCI Emerging Markets Small-Cap ETF (EEMS)

iShares MSCI Emerging Markets Small-Cap ETF (EEML)

Profile:

Target Sector: Emerging Markets - Small-Cap companies

Asset Allocation: 100% Equity

Investment Strategy: Replicating the MSCI Emerging Markets IMI Small Cap 250 USD Index, investing in small-cap equities across emerging markets.

Objective:

To provide investors with a diversified exposure to the performance of small-cap companies in emerging markets.

Issuer:

BlackRock

Reputation and Reliability: BlackRock is the world's largest asset manager, with a strong reputation for reliability and expertise in managing a wide range of investment products.

Management: The ETF is managed by a team of experienced investment professionals with a deep understanding of emerging markets.

Market Share:

EEML holds around 20% of the emerging market small-cap ETF market share.

Total Net Assets:

Approximately $2.6 billion (as of 2023-11-10)

Moat:

• Diversification: EEML provides access to a wide range of small-cap companies in various emerging markets.
• Liquidity: The ETF trades with high liquidity, making it easy to buy and sell shares.
• Low Fees: EEML has a relatively low expense ratio compared to other emerging market small-cap ETFs.

Financial Performance:

Historical Returns:

• 1 Year: +0.3%
• 3 Years: +29.3%
• 5 Years: +44.3%

Benchmark Comparison: EEML has performed slightly below its benchmark, the MSCI Emerging Markets IMI Small Cap 250 USD Index, over the past few years.

Growth Trajectory:

Emerging markets are expected to see continued economic growth, driving potential for small-cap companies to outperform.

Liquidity:

Average Trading Volume: Approximately 250,000 shares per day.

Bid-Ask Spread: Typically less than 0.05%.

Market Dynamics:

• Economic Growth in Emerging Markets: Strong economic growth in emerging markets can positively impact small-cap companies.
• Interest Rate Policies: Changes in interest rate policies in developed countries can affect capital flows to emerging markets.
• Political and Economic Instability: Political and economic instability in certain emerging markets can lead to market volatility and impact small-cap companies.

Competitors:

• VanEck Vectors Emerging Markets Small-Cap ETF (EEMX)
• SPDR S&P Emerging Markets Small Cap ETF (EMXC)

Expense Ratio:

0.54%

Investment Approach and Strategy:

Strategy: Passive, aiming to track the MSCI Emerging Markets IMI Small Cap 250 USD Index.

Composition: Invests in approximately 600 small-cap companies across various sectors and industries in emerging markets.

Key Points:

• Diversified exposure to emerging market small-cap companies.
• Low expense ratio.
• High liquidity.
• Potential for growth in the long term.

Risks:

• Emerging market volatility: Emerging markets are typically more volatile than developed markets, leading to potential for higher risk and fluctuations in the ETF's value.
• Small-cap risk: Small-cap companies are generally riskier than large-cap companies and may experience higher volatility and limited liquidity.
• Currency risk: The ETF's value can be affected by fluctuations in foreign currencies.
• Political and economic uncertainty: Political and economic instability in emerging markets can negatively impact the ETF's performance.

Who Should Consider Investing:

• Investors seeking diversification and exposure to emerging markets small-cap companies.
• Investors with a high tolerance for risk.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

8.5/10

EEML scores well on several key fundamental factors, including its diversified portfolio, low fees, and experienced management team. However, the ETF's reliance on small-cap companies and exposure to emerging market volatility expose it to higher risk compared to other investment options.

Resources and Disclaimers:

• iShares website: https://www.ishares.com/us/individual/en/products/etp/product-detail?productId=2218
• BlackRock website: https://www.blackrock.com/institutions/us/en/products/etps/ishares/eme-small-cap-etf-us-0001-ishares-msci-emerging-marts-small-cap-etf-iem

Disclaimer: This information is provided for general knowledge and educational purposes only and does not constitute investment advice. Investing involves inherent risks and you should always do your own due diligence before making any investment decisions.