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Is iShares MSCI Emerging Markets Multifactor ETF (EMGF) a Strong ETF Right Now?
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A smart beta exchange traded fund, the iShares MSCI Emerging Markets Multifactor ETF (EMGF - Free Report) debuted on 12/08/2015, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is managed by Blackrock, and has been able to amass over $831.52 million, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. This particular fund 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain 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's 12-month trailing dividend yield comes in at 3.19%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Taiwan Semiconductor Manufacturing accounts for about 4.35% of total assets, followed by China Construction Bank Corp H and Tencent Holdings Ltd.
EMGF's top 10 holdings account for about 22.72% of its total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI Emerging Markets Multifactor ETF has lost about -15.26% so far, and is down about -13.14% over the last 12 months (as of 08/24/2022). EMGF has traded between $41.59 and $54.46 in this past 52-week period.
The fund has a beta of 0.71 and standard deviation of 23.18% for the trailing three-year period. With about 294 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 $65.41 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.12 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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?
A smart beta exchange traded fund, the iShares MSCI Emerging Markets Multifactor ETF (EMGF - Free Report) debuted on 12/08/2015, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is managed by Blackrock, and has been able to amass over $831.52 million, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. This particular fund 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain 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's 12-month trailing dividend yield comes in at 3.19%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Taiwan Semiconductor Manufacturing accounts for about 4.35% of total assets, followed by China Construction Bank Corp H and Tencent Holdings Ltd.
EMGF's top 10 holdings account for about 22.72% of its total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI Emerging Markets Multifactor ETF has lost about -15.26% so far, and is down about -13.14% over the last 12 months (as of 08/24/2022). EMGF has traded between $41.59 and $54.46 in this past 52-week period.
The fund has a beta of 0.71 and standard deviation of 23.18% for the trailing three-year period. With about 294 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 $65.41 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.12 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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.