Launched on 12/08/2015, the iShares Emerging Markets Equity Factor ETF (EMGF) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $1.94 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. EMGF seeks to match the performance of the MSCI Emerging Markets Diversified Multiple-Factor Index before fees and expenses.
The STOXX Emerging Markets Equity Factor Index (USD) composes of stocks of large and mid-capitalization companies in emerging markets that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.26%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.99%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Taiwan Semiconductor Manufacturing accounts for about 10.3% of total assets, followed by Samsung Electronics Ltd and Sk Hynix.
Its top 10 holdings account for approximately 31.39% of EMGF's total assets under management.
Performance and Risk
The ETF has added about 26.35% and is up roughly 37.91% so far this year and in the past one year (as of 09/04/2026), respectively. EMGF has traded between $54.04 and $76.28 during this last 52-week period.
EMGF has a beta of 0.71 and standard deviation of 18.97% for the trailing three-year period. With about 743 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares Emerging Markets Equity Factor ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Emerging Markets Stock Index Fund ETF Shares (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard Emerging Markets Stock Index Fund ETF Shares has $127.24 billion in assets, iShares Core MSCI Emerging Markets ETF has $162.21 billion. VWO has an expense ratio of 0.06% and IEMG changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Emerging Markets Equity Factor ETF (EMGF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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