iShares MSCI Emerging Markets IndexEEM

Morningstar Rating

ETF Research and Analysis

by Bradley Kay
Suitability

IShares MSCI Emerging Markets Index EEM provides comprehensive exposure to the emerging-markets large-cap universe and is appropriate as a core holding even if we would not recommend it for the bulk of international equity exposure. This   Read more 

Bull Case

Emerging-markets stocks are a solid diversifier for a portfolio of developed-market equities as they sport substantial commodities price exposure and relatively low returns correlations.
With foreign-currency reserves at record highs and domestic consumption growing, emerging economies look well positioned to weather a global downturn.
This fund is the most liquid emerging-markets ETF by far, though the difference would be detectable only to those making frequent large trades. Read more 

Bear Case

Vanguard Emerging Markets Stock provides a much cheaper alternative that tracks the same index.

Emerging-markets equities are very volatile, with standard deviations about 50% to 60% higher than U.S. and developed-markets equities.
Many of the large-cap companies that dominate the MSCI Emerging Markets Index sell in competitive global markets, giving them less exposure to the emerging economies than investors might first expect. Read more 

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