'Core' iShares ETFs

In October of last year iShares debuted IEMG (iShares Core MSCI Emerging Markets, Expense Ratio 0.18%) and IEFA (iShares Core MSCI EAFE, Expense Ratio 0.14%).

The funds are off to a quick start, having raised $1.2 billion and $710 million in assets respectively in this rather short time frame.

IEMG has especially seen a meaningful uptick in trading volume in recent sessions, married with creation activity as well (+$270 mln in past month).

IEMG has notably vaulted to the number three spot in terms of broad EM based funds in terms of assets, behind the mighty VWO (Vanguard FTSE Emerging Markets, Expense Ratio 0.18%) and EEM (iShares MSCI Emerging Markets, Expense Ratio 0.67%). [‘Core’ iShares ETF Family Gets Solid Reception]

What is special about these funds and how they compare to the mammoth EEM and EFA (iShares MSCI EAFE, Expense Ratio 0.34%)?

The portfolios of IEMG and IEFA are designed to hold more individual securities (IEFA 2,519 versus EFA’s 927, while IEMG 1,636 versus EEM’s 852), which should broaden overall diversification. Also of major note to cost conscious ETF portfolio managers and institutions is the vast difference in expense ratios in the newer funds as compared to their larger and more tenured counterparts.