Nevertheless, EEM is still a relevant investment as its vast liquidity and tight bid/ask spreads attract large institutional traders whom care more about executing large bets quickly than the long-term cost of holding the fund.
IEMG was one of the top asset-gathering ETFs last year. In October, BlackRock lowered IEMG’s annual fee to 0.14% from 0.16% as part of a broader range of expense ratio reductions to the iShares core lineup.
Although some developing economies have been viewed as vulnerable to Donald Trump’s presidency and there are concerns about the impact of interest rate increases by the Federal Reserves on emerging markets that have to service dollar-denominated debt, some market observers believe emerging equities can perform well again in 2017.
“Additionally, emerging markets often have a higher exposure to commodities than more-developed markets, which has allowed them to cash in on the recent rebound in that area. A number of other factors can affect the performance of emerging-markets stocks, according to BlackRock, ranging from macroeconomic forces to the policies of the U.S. government,” according to the Journal.
For more information on the ETF market, visit our ETF performance reports category.