iShares Core MSCI EM IMI ETF USD Acc | EIMI |
Morningstar's Take
|10/05/2024by Monika Calay
| At a low and competitive fee, iShares Core MSCI Emerging Markets IMI ETF is an attractive option for investors seeking emerging-markets equity exposure. The fund tracks the performance of the MSCI Emerging Markets Investable Market Net Return Index. The index aims to capture large, mid-, and small-cap equities across 24 emerging-markets countries. With more than 3,400 constituents, the index covers approximately 99% of the free-float-adjusted market capitalization in each country. At the country level, the index has a long-standing allocation to China (20%-25%) that has been increasing since the 2017 phase-in inclusion of China A-shares. Other major country weightings are India, Taiwan, and South Korea, which concentrate approximately 70% of the portfolio in four key emerging markets. In terms of sectors, information technology, financials, consumer discretionary, industrials, communication services, and materials make up over 70% of the index. The performance of the MSCI Emerging Markets IMI has been varied across different countries over the past five years. China, while a major component of the index, saw its performance damped in 2023, with significant underperformance attributed to factors like pandemic policy impacts and geopolitical tensions. In contrast, Brazil showed resilience, with the MSCI Brazil Index outperforming the broader emerging-markets index despite facing economic headwinds. Taiwan and India were standout performers, buoyed by strong technological sectors and robust economic growth. Taiwan's semiconductor industry and India's rapidly growing equity market were pivotal in their outperformance compared with other emerging and developed markets. This diverse performance across key countries highlights the potential value of active management in emerging markets. The presence of political risks, such as those seen in Russia, and the prevalence of state-owned enterprises in the index underscore the value of local market expertise and quality screening in investment strategies. All that said, the exchange-traded fund's broad exposure and competitive fee structure make it an attractive option for investors, but the varying country performances suggest that there is room for active managers to add value through more nuanced and flexible approaches. |
All-cap exposure to emerging-markets equities at an attractive fee.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Above Average |
| Parent | Above Average |
| Process | Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
