ETF v praxi
EIMI (iShares Core MSCI EM IMI): ETF review — emerging markets comprehensively
Key takeaways
- EIMI tracks the MSCI Emerging Markets IMI index, which includes large, mid and small-cap companies from emerging markets — over 2,900 holdings in total.
- China, India, Taiwan and South Korea carry the largest weightings. Geopolitical and currency risks are higher than in developed markets.
- EIMI is an accumulating fund with Irish domicile (ISIN IE). Always verify the current TER on justETF — emerging market ETFs tend to be more expensive than developed-market funds.
- EIMI and IWDA together form the foundation of a global portfolio — IWDA covers developed markets, EIMI covers emerging markets.
- Emerging markets can deliver higher long-term returns, but at the cost of higher volatility and political risk.
What the fund tracks
The MSCI Emerging Markets IMI (Investable Market Index) goes further than the standard MSCI EM — it includes not just large and mid-cap but also small-cap stocks from emerging markets. This provides exposure to more localised economies absent from standard MSCI EM. Geographically China dominates (around 25–30%), followed by India, Taiwan and South Korea. Sectorally, technology, financials, consumer discretionary and energy are all represented.
Key parameters
EIMI is an accumulating fund with Irish domicile (ISIN starts with IE). Always verify the current TER on justETF — emerging-market funds tend to have higher fees than broad-market developed-country funds, because managing a portfolio of over 2,900 stocks from dozens of countries is more costly. The fund uses sampling rather than direct replication of all holdings.
Risks of emerging markets
EIMI carries specific risks not present in IWDA:
- Political and regulatory risk — in China, government intervention can materially affect equity prices (as the Alibaba case showed in 2021).
- Currency risk — dozens of different currencies add volatility on top of equity movements.
- Lower transparency — reporting standards and corporate governance in emerging markets are less stringent than in the US or EU.
- Liquidity — small-cap holdings can be less liquid in crisis moments.
Who it suits
EIMI is suitable for investors who want truly global exposure and are prepared to bear higher volatility. Typical use: as a 10–20% complement to IWDA. EIMI alone as the sole fund is less common — emerging markets are riskier and less stable than developed ones.
Role in a portfolio
The IWDA + EIMI combination forms a so-called "two-fund portfolio" — simple, cheap, global. How to build it is in the article how to build your first portfolio or on the ETF overview. A comparison of the All-World approach vs. two separate funds is in the article All-World vs. S&P 500.
FAQ
What is the difference between EIMI and a standard MSCI EM ETF?
Standard MSCI Emerging Markets covers only large and mid-cap companies. IMI (Investable Market Index) adds small-cap stocks — resulting in over 2,900 holdings instead of approximately 1,400. Greater coverage means better representation of local economies.
Why does EIMI have such a high weighting to China?
China is the largest emerging economy and its companies have a high market capitalisation. The index weights it accordingly. For investors who want lower Chinese exposure there are specialist indices that reduce or exclude China.
Is it worth adding EIMI to IWDA?
It depends on your approach. MSCI World covers only 23 developed countries and emerging markets represent approximately 12% of global market capitalisation that is missing. Adding EIMI fills this gap and increases geographic diversification — at the cost of slightly higher risk and complexity.
How do political risks affect EIMI's performance?
Historically, significantly. China's regulatory crackdown in 2021 sent Chinese tech stocks down by tens of percent — and because China accounts for a quarter of the index, the whole of EIMI felt it. Diversification across emerging markets dampens this risk but does not eliminate it.