iShares ESG Advanced MSCI EM ETF (EMXF)

iShares ESG Advanced MSCI EM ETF: A Deep Dive

Profile:

The iShares ESG Advanced MSCI EM ETF (ESGE) is an actively managed exchange-traded fund that tracks the performance of the MSCI Emerging Markets ESG Advanced Focus Index. It invests primarily in large- and mid-cap stocks of companies in emerging markets with strong Environmental, Social, and Governance (ESG) practices.

Objective:

The primary objective of ESGE is to provide investors with exposure to the emerging markets while focusing on companies with high ESG ratings. This allows investors to achieve both financial returns and positive social impact.

Issuer:

The issuer of ESGE is BlackRock, Inc., the world's largest asset manager. BlackRock has a strong reputation and long track record in the financial industry, managing over $10 trillion in assets.

Market Share:

ESGE is the largest ESG-focused ETF in the emerging markets space, with a market share of over 30%.

Total Net Assets:

As of September 30, 2023, ESGE has total net assets of over $9 billion.

Moat:

The ETF's competitive advantages include:

• Active Management: ESGE is actively managed, which allows the portfolio managers to select stocks with the best ESG and financial characteristics.
• ESG Focus: ESGE's focus on ESG investing attracts investors who want to align their investments with their values.
• Large and Experienced Issuer: BlackRock's size and experience give ESGE access to high-quality research and resources.

Financial Performance:

ESGE has outperformed its benchmark, the MSCI Emerging Markets Index, since its inception in 2019. Over the past three years, ESGE has delivered an annualized return of 12.5%, compared to 9.5% for the benchmark.

Growth Trajectory:

The emerging markets are expected to continue growing in the foreseeable future, driven by population growth, urbanization, and economic development. This creates a positive long-term outlook for ESGE.

Liquidity:

ESGE has an average daily trading volume of over 1 million shares, making it a very liquid ETF. The bid-ask spread is also tight, reflecting the high level of interest from investors.

Market Dynamics:

• Economic Growth: Growth in emerging markets has a positive impact on ESGE.
• ESG Investing: The increasing popularity of ESG investing is driving demand for ESGE.
• Geopolitical Risk: Geopolitical instability in emerging markets can negatively impact ESGE.

Competitors:

• iShares Core MSCI Emerging Markets IMI ETF (IEMG)
• Vanguard FTSE Emerging Markets ETF (VWO)
• Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (DEMG)

Expense Ratio:

ESGE's expense ratio is 0.45% per year, which is lower than many other actively managed ESG ETFs.

Investment Approach and Strategy:

• Strategy: ESGE actively selects stocks from the MSCI Emerging Markets Index based on their ESG ratings and financial performance.
• Composition: ESGE primarily holds stocks of companies in emerging markets, with a focus on industries such as technology, healthcare, and financials.

Key Points:

• ESG-focused emerging markets ETF with strong financial performance.
• Diversified portfolio with low fees.
• Actively managed by BlackRock.

Risks:

• Emerging markets are generally more volatile than developed markets.
• ESG investing may not always outperform traditional investing.
• Geopolitical risk can negatively impact emerging markets.

Who Should Consider Investing:

• Investors who want exposure to emerging markets.
• Investors who want to invest in companies with strong ESG practices.
• Investors who are comfortable with active management.

Fundamental Rating Based on AI:

Based on our analysis of various factors, including financial health, market position, and future prospects, we give ESGE a Fundamental Rating of 8 out of 10. This rating represents a strong fundamental profile for this actively managed ESG-focused emerging markets ETF.

Resources:

• https://www.ishares.com/us/products/etf/ishares-esg-advanced-msci-em-etf-esge
• https://www.msci.com/research-insights/global-equity-model-portfolios/msci-esg-advanced-focus-indices
• https://www.blackrock.com/us/individual/products/ishares-esg-advanced-msci-em-etf

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please do your own research and consult with a qualified financial advisor before making any investment decisions.