The iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) debuted in October 2012 as part of the first wave of iShares core ETFs geared toward cost-conscious investors.

Although IEMG is still two months shy of its second anniversary, the fund has become a force in the world of emerging markets ETFs. Originally positioned as a low-cost alternative to the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) and rival on fees to the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), IEMG with its 0.18% annual expense ratio has swelled to nearly $5.3 billion in assets under management. That says the ETF has gained traction with institutional investors as well retail investors. [iShares Core ETFs Gain Institutional Support]

Buoyed by compelling valuations that have, in part, driven investors back to emerging markets ETFs, IEMG is up nearly 16% this year and hit a new all-time high on Tuesday.

“After experiencing $11.7 billion of outflows during the first quarter of 2014, emerging markets ETFs returned to investor favor and delivered four straight months of inflows through July. We believe improving economic trends in key geographies and investor willingness to assume risk have been some of the catalysts,” said S&P Capital IQ in a new research note.

IEMG has hauled in $1.5 billion in new assets, making it one of the most impressive asset gatherers among emerging markets ETFs on a year-to-date basis. S&P Capital IQ rates the ETF overweight, the same rating the research firm applies to VWO.

“On a technical basis, IEMG is exhibiting bullish tendencies in our opinion, with the ETF trading notably above its 50-day moving average. Nevertheless we believe past performance is not a reason alone to invest in an ETF,” notes S&P Capital IQ.

Of course, past performance is no guarantee of future returns, but current country exposure can provide valuable clues about what an international ETF has in store for investors. As S&P Capital IQ notes, “before determining whether to invest in any emerging market ETF, we think investors need to understand the geographic exposure it provides and what is happening in the local markets.” [Managing ETFs the Tactical Way]

IEMG devotes over 45% of its combined weight to China, South Korea and Taiwan. The ETF’s only other double-digit country allocation is almost 10.6% to Brazil. Although it is one of the most advanced developing markets, South Korea has been a laggard compared to China, Brazil and others this year, but that could be set to change.

BlackRock has a positive outlook on South Korea, Asia’s fourth-largest economy and the asset manager is not the only party that feels that way.

“If President Park Geun-Hye (the first female leader of South Korea) has her way and successfully implements all three elements of her administration’s three-year economic innovation program, the country could enhance its fragile competitive posture inthe near future vis-a-vis its main industrial rivals in East Asia – namely, China, Japan and Taiwan,” said S&P in a note out earlier this month. [BlackRock Says to Reconsider Emerging Markets]

Taiwan, like South Korea, is another highly advanced emerging market that is attractive to conservative investors due to its low beta and relative lack of volatility compared to other emerging markets, such as Brazil and India.

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