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Huge Emerging Markets Fund Offers Diversification


Our coverage of broad-based emerging markets exchange-traded funds (ETFs) today will feature another huge U.S.-based emerging markets fund, iShares MSCI Emerging Markets Index (NYSE: EEM), with a whopping $30.6 billion in net assets.

A ???broad-based??? emerging markets ETF is one with investments not concentrated in a specific region. The fund seeks to track the investment of the MSCI Emerging Markets Index, which is composed of large- and mid-capitalization emerging market equities.

With money in more than 800 emerging-markets stocks, it is an understatement to say EEM???s portfolio is well diversified. The holding with the highest weight in the portfolio only makes up 3.77% of the fund???s investments, and all except nine holdings in the portfolio have weightings of less than 1%. This means is that two or three underperformers likely will have scant impact on the fund???s overall performance.

EEM has had a terrific year in 2016, with a total cash inflow of more than $6.7 billion, a number exceeded by only four other ETFs in the world…

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