It is a passive ETF that tracks an index of small companies in emerging markets such as India, Taiwan, and China. Rather than focusing on emerging-market large caps, it spreads investments across small caps, giving exposure to emerging-market domestic demand and small-cap growth.

It suits investors who want to diversify across emerging-market small caps and can tolerate the high volatility and currency risk that are characteristic of emerging markets and small caps.

It is an ETF managed by iShares using a passive (index-tracking) approach.

The fund tracks the MSCI Emerging Markets Small Cap Index, which is made up of small companies in emerging markets such as India, Taiwan, and China. Unlike general emerging-market ETFs centered on large caps, it spreads investments across small caps, which gives it exposure to the growth of small companies closer to emerging-market domestic demand.

• Concentrated in emerging-market small caps
• Exposure to small companies tied to emerging-market domestic demand

Assets under management (AUM) stand at $365.9M, and the total expense ratio is 0.72% per year.

Compared with IEMG and VWO, general emerging-market ETFs centered on large caps, the main point of comparison is this fund's concentration in small caps.

Emerging-market small caps react sensitively to global risk appetite, the strength of the dollar, and domestic economic conditions in each country. They tend to rise when risk appetite improves and domestic demand in emerging markets strengthens, and to fall during risk-off periods. Because emerging-market and small-cap characteristics overlap, volatility is very high.

Fund flows into emerging-market small caps diverge depending on global risk appetite, currency movements, and each country's domestic demand outlook, and money sometimes shifts toward related products when expectations for emerging-market growth rise. It is also worth noting that performance can vary widely depending on each country's economy and currency variables.

Exposure to small-company growth in emerging markets is its strength, while high volatility, emerging-market risk, and exchange rates are considerations.

For exposure to emerging-market small-cap dividend stocks, DGS is a direct alternative, and for a different approach to emerging-market small caps, products such as EWX are also worth comparing. For exposure to emerging markets excluding China, a product such as EMXC can also be considered. The three products shown in the table, IEMG, VWO, and EEM, are all centered on emerging-market large caps, so they differ from this fund's small-cap focus. The narrower exposure to emerging-market small caps is this ETF's distinguishing criterion.

Here are the points to review before investing in EEMS. Exposure to emerging-market small-company growth is appealing, but high volatility, emerging-market risk, and exchange rates need to be checked in advance. It is also a good idea to compare it with emerging-market large-cap and small-cap dividend products.

Each country's political and policy risk, currency movements, and emerging-market and small-cap volatility are the main variables for long-term performance, and because emerging-market and small-cap characteristics overlap, volatility is very high. Drawdowns can be large during broad emerging-market downturns.

It is a suitable candidate for investors who want to diversify across emerging-market small caps. If exposure to emerging-market large caps is the priority, consider products such as IEMG and VWO, and if you want a concentrated emerging-market small-cap position, it is advisable to compare them with this fund before choosing.