iShares EM ETFs Are Raking In Cash

Investors are embracing emerging markets exchange-traded funds again in significant fashion, and that is good news for BlackRock, Inc. BLK's iShares unit. The world's largest ETF issuer, iShares is also home to the ETF industry's largest stable of emerging markets ETFs.

A Whole Herd Of EM ETFs

That includes the venerable iShares MSCI Emerging Markets Indx (ETF) EEM, the second-largest emerging markets ETF by assets. EEM, still a favorite among institutional investors is a big reason why iShares emerging markets ETFs hauled in nearly $13 billion in new assets year-to-date as of September 9, according to BlackRock data.

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As of September 12, EEM had seen year-to-date inflows of over $6.7 billion, a total exceeded by just four other ETFs and good for the best 2016 inflows of any emerging markets ETF. Three emerging markets ETFs, two equity-based and one fixed income, rank among this year's top 10 asset-gathering ETFs, according to ETF.com.

Showing that it has its own following among professional investors, the iShares Core MSCI Emerging Markets ETF (iShares Inc. IEMG) saw year-to-date inflows of $4.9 billion as of September 9. IEMG is about a month away from its fourth anniversary, and when the ETF came to market, it was widely viewed as a cost-effective alternative to EEM.

“We have upgraded our view on emerging market (EM) equities to overweight, as EM growth stabilizes amid a pickup in global growth and a lower-for-longer interest rate environment,” said BlackRock in a recent note.

Continued Performance

Nearly four years later, IEMG has $16.2 billion in assets under management, indicating plenty of professional investors are embracing the ETF's lower fees. IEMG charges 0.16 percent per year compared to EEM's annual fee of 0.71 percent.

From July through September, iShares emerging markets ETFs added $9.6 billion in new money, according to issuer data. However, the figures mentioned to this point pertain to the issuer's diversified, equity-based strategies such as EEM and IEMG.

Those numbers do not include the iShares JPMorgan USD Emer Mkt Bnd Fd ETF EMB. EMB has added more than $4.3 billion in new assets this year, a figured surpassed by just nine other ETFs and just two other bond funds, both of which are also iShares products.

On the back of this year's inflows, EMB is now the world's largest emerging markets bond fund, a data point that includes mutual funds. EMB has a Europe-listed equivalent that has also ascended to the ranks of world's largest emerging markets debt funds.

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