BlackRock has introduced a distributing share class (EIMU LN) for its giant iShares Core MSCI Emerging Markets IMI UCITS ETF on London Stock Exchange.
The MSCI Emerging Markets IMI Index covers approximately 99% of the free float-adjusted market capitalization across 24 emerging market countries.
The fund tracks the MSCI Emerging Markets IMI Index which offers more exhaustive emerging market coverage than the better-known MSCI Emerging Markets Index.
The IMI (Investable Market Index) version captures all investable large, mid and small cap companies across 24 emerging market countries.
With 2,668 constituents, the index covers approximately 99% of the free float-adjusted market capitalization in each country (compared to 846 constituents for the MSCI EM Index, covering approximately 85% of the free float-adjusted market cap).
The largest country exposures by weight are China (28.0%), South Korea (14.7%), Taiwan (12.1%), India (8.9%), Brazil (7.3%) and South Africa (6.7%).
MSCI has announced its intention to start including Chinese A-Shares within its global indices; consequently, the index provider plans to add China A Large Cap stocks to the MSCI EM index suite under a two-step inclusion process.
The index’s sector allocations are dominated by the information technology (26.0%) and financials (22.3%) sectors, followed by consumer discretionary (10.7%), materials (8.1%), energy (6.6%), and consumer staples (6.4%). All data as of the end of February 2018.
Emerging markets have enjoyed a period of strong performance lately, with the MSCI Emerging Markets IMI Index gaining 29.5% over the past year compared to 19.4% for the global MSCI ACWI Index. The index started the year strongly but suffered the effects of February’s market correction; the index is up 3.1% year-to-date.
The new distributing share class launched by BlackRock trades under the ticker EIMU LN and has a total expense ratio (TER) of 0.25%. The initial ETF, with accumulating share class, was launched in May 2014 and has since seen its assets under management (AUM) swell to over $9.7 billion.
It is the largest ETF listed in Europe to provide exposure to the MSCI Emerging Markets Index or its IMI equivalent.
While the cost of the iShares fund is amongst the lowest offered in its category, it is beaten on price by the db x-trackers MSCI Emerging Markets Index UCITS ETF (XMME GY) and the Amundi MSCI Emerging Markets UCITS ETF (AEEM FP), which come in at 0.20% each and have assets of $980m and $4.4bn respectively.