Shareholder dilution in public companies in the emerging markets is widespread and significant, particularly in China. The holdings in EYLD won't have that issue, because eligibility is based on [dividend yield + net buybacks (buybacks - issuance)]. That's one reason why it ends up with a lower allocation to China and to SOE in general, even though those are not explicit index criteria.watchnerd wrote: ↑Sat Feb 08, 2020 5:32 pmIf you want ex-China, there is EMXC, iShares ex-China ETFjhfenton wrote: ↑Sat Feb 08, 2020 5:26 pm
I wish the ER were lower, but for better or worse it is in line with other small-cap EM funds (with less desirable portfolio characteristics). Having an EM fund with rampant shareholder dilution, a large proportion of state-owned enterprises, and a huge allocation to China might cost big in the long run too.
ER = .49
AUM = $34M
I don't understand your rampant shareholder dilution comment --- these are index ETFs, not CEFs.
I'm aware of EMXC. Unfortunately, beyond its exclusion of China, it's a completely vanilla fund holding only large and mid caps; and it also has low assets. For that exposure, 49 bp is absurd. (XCEM offers comparable exposure at 16 bp, but it has only $20.1 MM in assets, and often trades at ridiculous spreads.) I have both EMXC and XCEM on my watch list to see if either ever becomes viable. (The flip side is FLCH/Franklin FTSE China ETF at 0.19%. It's at $38.86 MM in assets after losing some during the current crisis.)
With every fund, I look at whether or not the cost is worth the exposure. That's why I don't have a value tilt for ex-US small cap. Instead vanilla small-cap VSS is our largest holding at 10 bp. I haven't seen a small-cap ex-US value fund with a portfolio that justifies the incremental ER. Funds like the iShares multifactor funds have so many country and sector constraints that you end up with fairly vanilla portfolios. So far, the same appears to be true for AVEM/Avantis EM Equity--though I'm watching to see how it develops.