This is a passive ETF that tracks the MSCI Emerging Markets Index and holds large- and mid-cap emerging market stocks in proportion to their market capitalization. It bundles stocks from many emerging countries, including China, Taiwan, India, South Korea, and Brazil, into a single product that offers broad diversified exposure.

It suits investors who want diversified exposure to emerging market equities through a single product, or who want to trade tactically using its liquidity and options.

It is a passive (index-tracking) ETF managed by BlackRock (iShares).

The fund holds the constituents of the MSCI Emerging Markets Index on a market-cap-weighted basis, tracking the performance of large- and mid-cap stocks across emerging markets. Changes to the index composition are reflected according to the index provider's regular reviews, and the fund does not actively select individual countries or stocks.

• Deep trading liquidity among emerging market ETFs
• An active options market that can be used for tactical strategies

Assets under management (AUM) stand at $29.1B, and the total expense ratio is 0.72% per year.

Its fee is somewhat higher than that of VWO, which tracks the same index, but it holds an edge in trading liquidity and options market size.

Emerging market equities are sensitive to global risk appetite, the strength of the US dollar, and China's economic trends, so they tend to be more volatile than developed markets. Return trends have also diverged widely from period to period as these macro conditions have shifted.

Capital tends to flow into emerging markets when the dollar weakens or risk appetite strengthens, while money can leave quickly when demand for safe assets grows. As a leading channel for emerging market allocation, the fund sees active inflows and outflows.

Its strengths are liquidity and broad emerging market diversification, while its drawbacks are a somewhat higher fee within its category and large country and currency swings.

Among the comparison targets in the same emerging market category shown in the table, VWO and IEMG are direct substitutes that track the same or a similar index at a lower fee. If you want emerging market exposure excluding China, EMXC can also be considered in the same category. If you want to reduce volatility, EEMV follows a minimum volatility strategy. For leveraged exposure, you could consider EDC (3x), and if you need to bet in the opposite direction, EDZ (3x inverse). If you want to focus on China within emerging markets, single-country ETFs such as FXI are also worth reviewing.

Here are the points to review before investing in EEM. It is a core vehicle for diversifying across emerging markets, but you should thoroughly check its fee level within the category, its concentration in particular countries and currencies, and its volatility during risk-off periods before buying.

The main sources of volatility are concentration in particular countries, swings in emerging market currencies, and the potential for sharp declines during global risk-off periods. Because volatility is higher than in developed markets, position sizing is important.

It is a standard choice for investors who want to diversify across emerging markets with a single product. If cost is the priority, VWO and IEMG are a better fit, while EEM suits those who value liquidity and options use.