(EDM2) iShares MSCI EM ESG - Ratings and Ratios

The iShares MSCI EM ESG Enhanced UCITS ETF USD Acc (XETRA: EDM2) is designed to deliver a total return, combining both capital appreciation and income, by tracking the performance of the MSCI EM ESG Enhanced Focus Index. This ETF is part of BlackRocks iShares lineup, a well-established provider of exchange-traded funds. The fund is domiciled in Ireland, which is a common and favorable jurisdiction for UCITS-compliant ETFs due to its regulatory framework and tax efficiency.

The ETF focuses on emerging markets, offering exposure to companies in these regions that meet specific ESG (Environmental, Social, and Governance) criteria. The MSCI EM ESG Enhanced Focus Index is designed to reflect the performance of companies that have higher ESG ratings relative to their peers, while also incorporating additional ESG-related screens. This makes the fund appealing to investors who prioritize sustainability and ethical considerations in their portfolios.

With an AUM of approximately €5.006 billion, this ETF is one of the larger funds in its category, which typically suggests higher liquidity and tighter bid-ask spreads. The fund is listed on XETRA, a major European exchange, and is categorized under the Global Emerging Markets Equity segment. It is structured as a UCITS (Undertakings for the Collective Investment in Transferable Securities) compliant ETF, which ensures adherence to strict regulatory standards and provides investors with a high level of transparency and investor protection.

From a portfolio construction standpoint, the funds ESG focus means it may exclude or underweight certain companies that do not meet the ESG criteria, potentially leading to a different risk-return profile compared to traditional emerging markets ETFs. Investors should consider how this ESG tilt aligns with their investment goals and risk tolerance. Additionally, the funds tracking error relative to the underlying index is a key metric for fund managers and investors to monitor, as it indicates how closely the ETF replicates the indexs performance.