Amundi IS MSCI Emerging Markets AE-C |
by Monika Calay
Amundi IS MSCI Emerging Markets ETF offers investors a comprehensive and cost-effective way to tap into the emerging-markets equity space. It closely tracks the MSCI Emerging Markets Index, which comprises approximately 1,400 stocks across 24 countries, providing a broad representation of the emerging-markets landscape. The fund has a pronounced large-cap focus and has become particularly notable for its increasing concentration in Chinese equities. This is largely due to the phased inclusion of China A-shares since 2017, making China a significant portion of the index despite a market correction in 2021. Other major country allocations include Taiwan, India, and South Korea, which together with China, account for about half of the portfolio's exposure. The performance of the MSCI Emerging Markets Index has been varied across different countries over the past five years. China, while a major component of the index, has seen its performance damped in 2023, with significant underperformance attributed to factors like COVID-19 policy impacts and geopolitical tensions. However, Brazil has shown resilience, with the MSCI Brazil Index outperforming the broader emerging-markets index despite facing economic headwinds. Taiwan and India have been standout performers, buoyed by strong technological sectors and robust economic growth. Taiwan's semiconductor industry and India's rapidly growing equity market have been pivotal in their outperformance compared with other emerging and developed markets. This diverse performance across key countries highlights the potential value of active management in emerging markets. The presence of political risks, such as those seen in Russia, and the prevalence of state-owned enterprises in the index underscore the value of local market expertise and quality screening in investment strategies. With an ongoing charge of 0.20%, this fund is competitive relative to its passive and active peers. All that said, the exchange-traded fund's broad exposure and competitive fee relative to active funds make it an attractive option for investors, but the varying country performances suggest that there is room for active managers to add value through more nuanced and flexible approaches. |
Morningstar Pillars | |
People | Above Average |
Parent | Average |
Process | Average |
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