iShares Rolls Out Small-Cap EM ETF

Blackrock's BLK iShares unit, the largest U.S. ETF issuer, introduced the iShares MSCI Emerging Markets Small Cap Index Fund EEMS today as a small-cap complement to the firm's wildly popular iShares MSCI Emerging Markets Index Fund EEM. EEMS will be benchmarked to the MSCI Emerging Markets Small Cap Index and the index's top three country weights as of July 31 are Taiwan (19.86%), South Korea (17.35%) and China (16.46%). The top three country sector exposure weightings are consumer discretionary (17.09%), industrials (16.90%) and financials (16.59%), according to a statement issued by iShares. “In the long-term, investors can look to emerging market small cap stocks as the driver of the next wave of emerging market growth,” said Russ Koesterich, iShares Global Chief Investment Strategist at BlackRock, in the statement. “In the short-term, emerging markets may be more defensively positioned than conventional wisdom might suggest.” EEMS isn't the first small-cap ETF to take a multi-country approach to emerging markets. The new ETF will find immediate competition in the form of the WisdomTree Emerging Markets Small-Cap Dividend ETF DGS and the SPDR S&P Emerging Markets Small Cap ETF EWX. EEMS' underlying index tracks almost 660 stocks from 21 countries. Other country allocations include Brazil, India, Hong Kong, Indonesia, Malaysia and South Africa.