Morningstar Rating

ETF Research and Analysis

by Patricia Oey
Suitability
IShares MSCI Emerging Markets EEM provides market-cap-weighted exposure to equities from 23 emerging-markets countries. This fund is by far the most liquid emerging-markets exchange-traded fund, but with an annual expense   Read more 

Bull Case

Emerging-markets stocks can provide diversification benefits, as they are exposed to different macro trends and foreign currencies.
Long-term growth drivers for many companies in this fund include infrastructure spending and a rising middle class.
Investors in this fund may also benefit in the long run from appreciating emerging-markets currencies. Read more 

Bear Case

Emerging-markets equities are very volatile, especially during periods of high uncertainty in global markets.
Many large-cap stocks in this fund are government-controlled; at times, these companies may place economic or political goals above profitability.
Record-low interest rates in the developed world have helped drive strong investment flows into emerging markets. A sudden outflow of funds may result in short-term volatility in emerging-markets currencies and asset prices. Read more 

Active or Index for Overseas Exposure? 
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