iShares pushes the emerging markets envelope with the launch of two new regional ETFs.
BlackRock’s iShares, the biggest purveyor of exchange-traded products, today launched two new regional emerging market funds, a first-to-market one targeting Europe, the Middle East and Africa, and the other focused on Latin America. Both ETFs track MSCI indexes and have primary listings on Nasdaq.
The two funds come with an expense ratio of 0.49 percent. Their names and tickers are as follows:
- iShares MSCI Emerging Markets Latin America (NasdaqGM: EEML)
- iShares MSCI Emerging Markets EMEA Index Fund (NasdaqGM: EEME)
EEME is the first ETF to offer an exposure to European, Middle Eastern and African emerging market equities, San Francisco-based iShares said in an emailed communique on the rollout. The ETF targets the Czech Republic, Egypt, Hungary, Morocco, Poland, Russia, South Africa and Turkey, according to the fund’s prospectuses.
EEML, the ETF focused on Latin America, targets the following five countries: Brazil, Chile, Colombia, Mexico and Peru.
The two funds reflect the latest phase of emerging market ETF investing. While broad ETFs, such as the $35 billion iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) still rule the roost in terms of assets gathered, fund companies are fine-tuning strategies. That has meant regional funds, such as EEML and EEME, as well as ETFs focused on different-sized companies within the developing world.
Both of the iShares funds will include weightings in energy, financial and materials companies, according to the funds’ respective prospectuses.
Also, both ETFs will utilize representative sampling indexing strategies to achieve their objectives, meaning they won’t own all the securities in the index.
The stocks are selected based on factors such as market capitalization, industry weightings, as well as fundamental characteristics like variability of returns and yield.