EMGF Profile
The iShares MSCI Emerging Markets Multifactor ETF aims to offer investors exposure to a diversified portfolio of equity securities from emerging markets, with a focus on factors that historically drive long-term returns. The fund typically invests at least 80% of its assets in securities that are constituents of the underlying MSCI Emerging Markets Multifactor Index, or in investments with similar economic characteristics. This strategic allocation is designed to capture the performance of emerging market equities while targeting specific factors known to contribute to higher returns.
The underlying index employs a multifactor approach, selecting equities based on several factors including value, momentum, quality, and low volatility. By focusing on these factors, the index seeks to identify stocks that are not only undervalued but also exhibit strong performance trends, financial stability, and reduced volatility. This methodology aims to enhance returns and manage risk relative to the broader MSCI Emerging Markets Index, which encompasses a wide range of emerging market companies without factor-based filtering.
The fund's investment strategy reflects a commitment to leveraging factor-based investing principles within emerging markets, a region known for its high growth potential but also for its volatility and market inefficiencies. By concentrating on factors that historically contribute to superior performance, the ETF aims to provide investors with a more targeted approach to emerging market equities, potentially improving returns while mitigating some of the inherent risks associated with these markets.
As a non-diversified fund, the iShares MSCI Emerging Markets Multifactor ETF may carry higher risks compared to more broadly diversified investments. The concentration on specific factors and emerging market securities can result in increased volatility and sector-specific risks. However, this approach is intended to capitalize on growth opportunities within emerging markets while strategically managing exposure to risk factors through a multifactor investment model.
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