Let’s discover together one of the best products in emerging markets by yield in the last 3-5 years.
In the investment world, emerging markets have long captured the attention of investors in search of significant growth opportunities. But what happens when a major alliance of emerging nations expands further? The BRICS alliance, made up of Brazil, Russia, India, China, and South Africa, has always been a focal point for investors interested in emerging markets. However, it is now about to undergo a monumental expansion, with the entry of six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.
In this context of economic growth and international collaboration, it is essential to closely analyze emerging markets and consider medium and long-term investment opportunities. ETFs (Exchange-Traded Funds) are increasingly popular instruments for investors interested in this market. One of these, the iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc), has attracted attention thanks to its strong 3-year and 5-year performances of 11.10 respectively % and 16.47%. In this article, we will take a detailed look at this product by providing a comprehensive analysis of its key features.
iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) - IE00BKM4GZ66
The iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) deserves careful consideration within the emerging markets-oriented Exchange-Traded Fund (ETF) category. Its annual management rate (TER) of 0.14% ranks among the lowest within the category, with costs as low as 0.55%. In addition, the fund has a considerable size in terms of assets under management and trades a high monthly contract value of around €20-25m. However, it is important to examine the characteristics and limitations of the ETF to get the full picture.
Cost Competitiveness - A significant aspect of the iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) is its TER which makes it an economical choice compared to other funds in the category. With a annual management rate (TER) of 0.14%, this ETF ranks below average cost among the broad range of emerging market ETFs, where the total expenses can vary as much as 0.55%. This level of expense can translate into significant long-term savings for investors, giving the ETF a cost advantage.
Size and Capitalization - The ETF has a sizeable assets under management, with a value of 16,002 million Euro, ranking among the largest in its category. This dimension promotes greater liquidity and stability, essential elements for correct trading without "slippage" or the risk of not executing the transaction at the desired price.
Optimized Sampling Replication - A materiality to consider when analyzing the iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) is its Optimized Sampling Replication Strategy of the underlying index, the MSCI Emerging Markets Investable Market (IMI). In this strategy, the fund does not track each individual index constituent but rather selects and holds a representative sample of the stocks deemed most significant within the benchmark. This selection aims to maintain a close correlation with the performance overall index, but not identical.
The optimized sampling approach is a common practice in many ETFs, as it can help keep costs down. However, it is important to note that this strategy may result in some differences in returns versus the benchmark index, especially in times of high market volatility or when stocks excluded from the index perform significantly differently from stocks included. Investors should be aware of this difference and consider how the optimized sampling strategy might affect the fund’s return over the long term, even though the ETF has shown some resilience during times of market downturn.
Conclusions
In the context of the expansion of the BRICS alliance and the growing importance of emerging markets, the iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) stands out as an option to be evaluated over the medium to long term.
This ETF offers significant advantages, including competitive costs with a TER of 0.14% and a considerable size in terms of assets under management, ensuring liquidity and stability. However, it is important to note that it uses an optimized sampling replication strategy, which may result in some performance differences compared to the benchmark index.
Ultimately, the choice depends on the needs of the investor. Before deciding, it is advisable to carry out a comprehensive analysis based on your financial goals and risk profile.
|Disclaimer
The information and considerations contained in this article should not be relied upon as the sole and principal aid in making investment decisions. The reader maintains full freedom in his investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation of public savings.|
Original article published on Money.it Italy 2023-09-04 18:33:00. Original title: Il migliore ETF sui mercati emergenti da tenere sotto la lente nel medio/lungo termine
