Dallas, Texas 12/10/2013 (FINANCIALSTRENDS) – iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) is an exchange traded index bench marked fund which has accumulated market cap of $42 billion. In its previous avatar it was known as iShares MSCI Emerging Markets Index Fund. As the fund name suggests, it primarily tries to expose its investors to the potential of the nascent emerging markets across the globe. Over the past the year the emerging markets have gone through a sinusoidal curve with regards to their economy growth rates. The performance of this stock too has been in line with these global developments and investors who are looking to have part of their investments exposed to the emerging markets have continued to stay invested in the stock.
Type of Fund
iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) has internalized an investment strategy which is aligned with the price offerings and the dividend yields of company stock which are operating in the emerging markets. It tracks its performance against the bench mark MSCI Emerging Markets Index. For the benefit of the uninitiated investors, index bench marked funds like iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) try and replicate the performance of the broader market index that they peg themselves to and ascribe to the investment belief that even the shrewdest of the fund managers cannot outperform the overall market in the long run. Investors who are satisfied with returns which are in line with the target market performance opt for such ETF and have the satisfaction of paying relatively lower fees in comparison to other ETF.
Type of Holdings
iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) fund has systematically been upping its investments in a select few stock which are traded and tracked by the MSCI Emerging Markets Index. Its investment profile mirrors that of the overall stocks profile exhibited by the MSCI index. iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) primarily concentrates on securities which are issued by companies which are not based in United States. In order to manage and time to time switch its investment patterns, the fund relies on the advice provided by third party investment advisory firm BlackRock Fund Advisors.
Performance Over The Past One Year
Over the past one year, iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) has been trailing the broader Asian markets by a small margin. It has shown a 0.99 percent increase in its market valuations over the trailing 12 months. This is well below the average rate at which the emerging market browsers have been performing across the markets of China, India, Russia, South Africa and Brazil over the same period. On similar lines has been the stock’s dividend payout track record. Over the past 12 months, the stock has paid out dividend yield of 1.79 percent which translates to a $0.75 dividend payout per share. At current valuations the stock is trading at $41.94 per share, which is 2.22 percent more than its prior day close. At current price points the stock is trading at 6.23 percent lower than its prior 52 week high price points. Over the past year, it has been range bound between $35.69 and $44.74 per share.
Performance over The Past Three Months
iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) exchange traded fund shares over the past three months have seen better returns as compared to a broader one year perspective. It has gained 2.22 percent in valuation over the past three months and is almost in line with the returns which are tracked by the emerging markets in the same period. Its simple moving average over the past 200 days has come in at 2.35% which is again in line with broader market sentiments in its target market.
In my opinion, investors in this index linked iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) fund are better served to hold on to their investments time being as the emerging market browsers have been lately showing signs of reinvigoration and are expected to post significantly higher growth in comparison to more mature markets in U.S and Europe as the native economies have managed to gather momentum towards growth in the past couple of months.