iShares® ESG MSCI EM Leaders ETF (LDEM)

Overview of iShares® ESG MSCI EM Leaders ETF (ESR)

Profile

Focus: Emerging market equities, with an ESG (environmental, social, and governance) focus.

Asset allocation: Primarily invests in large and mid-cap stocks from emerging markets.

Investment strategy: Tracks the MSCI EM Leaders ESG Index, which selects companies with strong ESG ratings within each sector.

Objective

The primary goal of ESR is to provide long-term capital appreciation by investing in a portfolio of ESG-conscious emerging market equities.

Issuer

BlackRock: A leading global investment management firm with a reputation for innovation and strong track record.

Management: Experienced team with expertise in ESG investing and emerging markets.

Market Share

ESR holds a significant market share within the ESG emerging market equity ETF space.

Total Net Assets

As of August 9, 2023, ESR had approximately $4.51 billion in assets under management.

Moat

• ESG Focus: ESR's ESG focus differentiates it from other broad emerging market ETFs.
• Large and experienced issuer: BlackRock's strong reputation and expertise provide investors with confidence.
• Strong Index Tracking: The ETF closely tracks its benchmark index, providing investors with transparent exposure to the chosen market segment.

Financial Performance

Historical Performance: ESR has delivered competitive returns compared to its benchmark and other emerging market ETFs.

Benchmark Comparison: ESR has slightly outperformed the MSCI EM Leaders Index and its peers over the past 3 and 5 years.

Growth Trajectory

The emerging market equity space is expected to experience long-term growth, as these economies generally grow faster than developed economies.

Liquidity

Average Trading Volume: ESR has a healthy average trading volume, making it easy to buy and sell shares.

Bid-Ask Spread: The bid-ask spread is tight, minimizing transaction costs for investors.

Market Dynamics

Factors affecting ESR's market environment include:

• Global economic growth
• Emerging market political and economic stability
• Commodity prices
• Investor sentiment towards emerging markets and ESG investing

Competitors

• iShares MSCI Emerging Markets ESG Optimized ETF (EMXF)
• SPDR S&P Emerging Markets ESG ETF (SPEM)
• Xtrackers MSCI Emerging Markets ESG Leaders Equity UCITS ETF 1C (XSEE)

Expense Ratio

The expense ratio for ESR is 0.40%.

Investment Approach and Strategy

• Strategy: Tracks the MSCI EM Leaders ESG Index.
• Composition: Primarily holds large and mid-cap stocks from emerging markets with high ESG ratings.

Key Points

• ESG-focused: Provides investors with exposure to emerging market equities while adhering to ESG principles.
• Established issuer: BlackRock's strong reputation and expertise add confidence.
• Strong track record: ESR has delivered competitive returns compared to its benchmark.
• Liquid and accessible: High trading volume and tight bid-ask spread facilitate easy buying and selling.

Risks

• Emerging market volatility: Emerging markets can be more volatile than developed markets.
• ESG criteria: ESG factors may limit the investment universe and potentially impact returns.
• Index tracking error: The ETF may not perfectly track the performance of its benchmark index.

Who Should Consider Investing?

ESR is suitable for investors seeking:

• Long-term capital appreciation
• Exposure to emerging market equities
• Investments aligned with ESG principles
• A passively managed, easy-to-trade ETF

Fundamental Rating Based on AI

AI Rating: 8.5/10

ESR stands out with its ESG focus, established issuer, strong track record, and liquidity. However, the inherent volatility of emerging markets and potential tracking error pose some risks.

Resources and Disclaimers

This information is for educational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.

Sources:

• https://www.ishares.com/us/products/etf-product-detail?prod_code=en-us:EUSA
• https://www.blackrock.com/us/individual/products/etfs/emea
• https://www.msci.com/market-classification

Disclaimer: The information provided is based on publicly available data and may not be completely accurate or up to date. Any opinions or analysis provided are solely for educational purposes and should not be considered investment advice.