Is IEM a good ETF?
IEM is the iShares MSCI Emerging Markets ETF from iShares. It tracks the MSCI Emerging Markets Index. We classify it under EM and Market-Cap. With about $1.73 billion in assets it is a large, highly liquid fund.
On a total-return basis, IEM has delivered 9.13% a year over 10 years (ranked 52nd of 108 ETFs we track), 8.02% a year over 5 years (ranked 82nd of 188 ETFs we track), 16.78% a year over 3 years (ranked 49th of 226 ETFs we track), and 24.46% a year over 1 year (ranked 30th of 308 ETFs we track). Its strongest showing is over 1 year, where it sits in the top 10% of all ETFs we track.
The management fee of 0.71% is high, which is common for active, geared or thematic strategies and only worth paying if the approach justifies it. For comparison, similar ETFs average around 0.28%. If cost is your priority, EMXC (0.26%), BEMG (0.35%), and AVTE (0.45%) cover similar ground for less. It pays a low 1.45% yield, so most of its return must come from capital growth.
Over the past 10 years its volatility has been moderate (annualised standard deviation around 12.17%), meaning the kind of swings you'd expect from a diversified equity fund. Its 10-year Sharpe ratio of 0.6 is reasonable — that's the return it has earned per unit of risk taken (higher is better).
Strengths
- Top-10% returns over 1 year (30th of 308 ETFs we track).
Things to watch
- A 0.71% management fee is high and compounds against you over time.
- Pricier than similar ETFs, which average around 0.28%.
- Cheaper alternatives exist: EMXC, BEMG, and AVTE.
Good to know
- Low 1.45% yield — this is a growth-oriented fund, not an income play.
What IEM's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Emerging markets — developing economies such as China, India, Brazil and Taiwan. High growth potential with materially higher volatility, currency and political risk.
- Market regime
- Often trades at cheaper valuations than developed markets and performs well in global risk-on phases and when the US dollar is weak. Can endure long stretches of underperformance.
- In a portfolio
- A satellite growth allocation for patient investors with a long horizon and tolerance for big swings.
Holdings are weighted by company size, so the largest companies carry the most weight. These funds are cheap, tax-efficient and self-rebalancing.
- Market regime
- Works in almost any regime as a low-maintenance core. The trade-off is concentration — you automatically own more of whatever has already become expensive at the top of a bull market.
- In a portfolio
- The classic buy-and-hold core of most portfolios. Well suited to long-term, hands-off investing.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.