Is iShares Emerging Markets Equity Factor ETF (EMGF) a Low-Cost, Diversified Option for Emerging Market Investors?

The iShares Emerging Markets Equity Factor ETF (EMGF) is a smart beta exchange traded fund that was launched on 12/08/2015, designed to offer broad exposure to the Broad Emerging Market ETFs category of the market. Smart beta ETFs are a type of fund that tracks non-cap weighted strategies, aiming to pick stocks with better chances of risk-return performance based on certain fundamental characteristics or a mix of such characteristics. The fund is managed by Blackrock and has amassed over $887.40 million, making it one of the larger ETFs in the Broad Emerging Market ETFs. It seeks to match the performance of the MSCI Emerging Markets Diversified Multiple-Factor Index and has an annual operating expense ratio of 0.26%, making it one of the cheaper products in the space. The fund's 12-month trailing dividend yield is 3.50%. In terms of sector exposure and top holdings, Taiwan Semiconductor Manufacturing accounts for about 8.61% of the fund's total assets, followed by Tencent Holdings Ltd and Alibaba Group Holding Ltd. The top 10 holdings account for about 25.23% of its total assets under management. The ETF has gained about 14.17% so far this year and was up about 14.25% in the last one year (as of 06/17/2025). It has a beta of 0.59 and a standard deviation of 16.34% for the trailing three-year period, effectively diversifying company-specific risk with about 611 holdings. Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs. However, there are other ETFs in the space such as Vanguard FTSE Emerging Markets ETF (VWO) and iShares Core MSCI Emerging Markets ETF (IEMG) that investors could consider. VWO has an expense ratio of 0.07% and IEMG charges 0.09%. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on the latest developments in the ETF investing universe, please visit Zacks ETF Center.