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Is iShares MSCI Emerging Markets Multifactor ETF (EMGF) a Strong ETF Right Now?
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The iShares MSCI Emerging Markets Multifactor ETF (EMGF - Free Report) made its debut on 12/08/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Blackrock, EMGF has amassed assets over $923.64 million, making it one of the larger ETFs in the Broad Emerging Market ETFs. EMGF seeks to match the performance of the MSCI Emerging Markets Diversified Multiple-Factor Index before fees and expenses.
The MSCI Emerging Market Diversified Multiple-Factor Index is composed of stocks of large and mid-capitalization companies in emerging markets that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.45% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.46%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing accounts for about 4.32% of the fund's total assets, followed by Infosys Ltd (INFY - Free Report) and United Micro Electronics Corp.
Performance and Risk
The ETF has lost about -0.14% so far this year and is down about -2.58% in the last one year (as of 02/16/2022). In the past 52-week period, it has traded between $49.29 and $55.13.
The fund has a beta of 0.77 and standard deviation of 22.50% for the trailing three-year period. With about 243 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI Emerging Markets Multifactor ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $77.25 billion in assets, Vanguard FTSE Emerging Markets ETF has $82.81 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is iShares MSCI Emerging Markets Multifactor ETF (EMGF) a Strong ETF Right Now?
The iShares MSCI Emerging Markets Multifactor ETF (EMGF - Free Report) made its debut on 12/08/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Blackrock, EMGF has amassed assets over $923.64 million, making it one of the larger ETFs in the Broad Emerging Market ETFs. EMGF seeks to match the performance of the MSCI Emerging Markets Diversified Multiple-Factor Index before fees and expenses.
The MSCI Emerging Market Diversified Multiple-Factor Index is composed of stocks of large and mid-capitalization companies in emerging markets that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.45% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.46%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing accounts for about 4.32% of the fund's total assets, followed by Infosys Ltd (INFY - Free Report) and United Micro Electronics Corp.
Performance and Risk
The ETF has lost about -0.14% so far this year and is down about -2.58% in the last one year (as of 02/16/2022). In the past 52-week period, it has traded between $49.29 and $55.13.
The fund has a beta of 0.77 and standard deviation of 22.50% for the trailing three-year period. With about 243 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI Emerging Markets Multifactor ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $77.25 billion in assets, Vanguard FTSE Emerging Markets ETF has $82.81 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.