Taiwan and South Korea, two of the lowest beta developing markets, are among EEMV’s largest non-China country weights. Since it is a low volatility fund, EEMV is, not surprisingly, lightly allocated to volatile emerging markets such as Brazil and Russia.
Low volatility takes on a different meaning at the sector level with EEMV than it does with equivalent U.S.-focused ETFs. For example, EEMV’s combined consumer staples and utilities weight of 21% does not exceed the almost 29% the ETF devotes to financial services stocks. However, when combining EEMV’s weights to bank stocks, utilities, energy and materials names, the ETF does present some risk from state-controlled enterprises. [Ditching State-Run Companies in a new ETF]
“The difference between EEMV and EEM is quite simple: The volatility of each stock is evaluated, along with the correlations between stocks. And then, a number of constraints are applied to ensure adequate diversification and representation of the broad market, while minimizing volatility,” according to a Seeking Alpha post.
iShares MSCI Emerging Markets Minimum Volatility ETF
