XTrackers MSCI Emerging Markets UCITS ETF 1D

Issuer: Xtrackers

Asset Class: Equity

TER: 18bps

Trading Currency: USD

Pays Income: False

Listing Date: 15 Nov 2021

Ticker: XEMD

ISIN: IE000GWA2J58

This fund offers investors a strategic tool to access the long-term growth potential inherent in developing economies. By tracking a major emerging markets benchmark, it provides diversified exposure to a wide array of companies poised to benefit from powerful secular trends such as a burgeoning middle class, rapid urbanization, and technological advancement. This approach allows for participation in the dynamic expansion of these markets while mitigating the concentration risk associated with investing in single countries or companies. It serves as a comprehensive solution for capturing the economic vitality of nations that are often characterized by younger populations and faster GDP growth rates compared to their developed counterparts, making it a compelling option for those seeking to enhance the growth profile of their portfolio.

The underlying portfolio is built upon the MSCI Emerging Markets Index, a widely recognized benchmark that encompasses large and mid-capitalization stocks across approximately 24 emerging market countries. This results in a broad representation of key economies such as China, India, Taiwan, Brazil, and South Korea. The investment is diversified not only geographically but also across various economic sectors, including Information Technology, Financials, Consumer Discretionary, and Materials. This construction ensures that investors gain a balanced exposure to the multifaceted nature of emerging economies, from technology innovators and financial institutions to consumer brands and industrial powerhouses. The physical replication method means the fund holds the actual shares of the constituent companies, providing direct ownership and transparency.

As a core portfolio component, this investment can offer significant diversification benefits relative to a portfolio focused solely on developed markets. It is particularly suitable for investors with a long-term investment horizon who can tolerate the higher levels of volatility typically associated with emerging market equities. The instrument provides a cost-effective and liquid vehicle to gain this exposure, eliminating the complexities and higher costs often involved in direct investment in multiple overseas markets. By allocating a portion of their assets to this fund, investors can strategically position themselves to capitalize on the structural growth stories shaping the future of the global economy.