Reflecting the rapidly growing popularity of emerging markets, iShares has filed for two new sector exchange traded funds (ETFs) focusing on the asset class.

iShares has filed with the Securities and Exchange Commission (SEC) to launch the following ETFs:

• iShares Emerging Markets Financial Sector ETF
• iShares Emerging Markets Materials Sector Index Fund

A large inflow of assets into emerging markets signals that the timing could be right for the launch of these funds. Last month, about $1.76 billion in net inflows was seen by iShares MSCI Emerging Markets (NYSEArca: EEM). Likewise, Vanguard Emerging Markets (NYSEArca:VWO) saw $2.2 billion in net inflows in the same period.

There are three levels of concentration as far as emerging markets are concerned. The first level of concentration to consider is location. Broad emerging-markets funds such as EEM and VWO diversify assets over a handful of emerging markets, says Don Dion for The Street. It is necessary to make sure there is not a lot of cross-exposure taking place.

Secondly, beware of over-concentrated holdings. Ideally, the top holding should not make up more than 10% of holdings. If you are looking to purchase a fund with larger concentrations, make sure to monitor those holdings in particular. A large component can have a large impact on your portfolio. (Why stop losses matter).

Last, make sure to check out the sector components. If an over-allocation to financials or energy is selected, then the fund may become too volatile and diversification is not going to be as promising.

iShares’ filing is just the latest in growing interest in emerging markets. Both Global X (Check out their new ETFs) and Emerging Global Shares (See their latest offerings) have added to their line-up of emerging market offerings. PowerShares has the PowerShares Emerging Markets Infrastructure (NYSEArca: PXR), as well. It’s up 86.3% year-to-date.

Now that the many broader developing regions and countries have been targeted with ETFs, it seems providers are increasingly turning to sectors in these markets to give investors more options for their portfolios. As with any emerging market fund, follow the trend lines in order to protect yourself. (How to follow trends).

For more stories about new ETFs, visit our New ETF category.

Tags: EEM, Emerging Markets, Global ETFs, Infrastructure, New ETFs, PXR, Sector ETFs, VWO