The rising popularity of IEMG suggests that investors are favoring the cheaper “core” iShares emerging market product over the older option – IEMG has a 0.18% expense ratio, compared to EEM’s 0.69% expense ratio. Additionally, more wary investors may be turning to EEMV as a way track the emerging markets without the steep price swings.
“For asset allocation into EM, we prefer EEMV which takes advantage of recent equity and FX correlations to try to minimize portfolio risk,” Deutsche strategists added.
The low-volatility emerging market ETF helps investors tap into the growth opportunities of the developing economies and helps limit potential swings in a notoriously risky region.
“We think a low volatility approach offers investors with a way to participate in the stronger growth prospects of emerging markets, while trying to reduce their risk profiles,” Todd Rosenbluth, S&P Capital IQ Director of ETF Research, said in a note.
For more information on the developing economies, visit our emerging markets category.
Max Chen contributed to this article