The fund tracks an index that screens out companies holding fossil fuel reserves from the MSCI Emerging Markets Index. It offers core exposure, broadly diversified across emerging market large and mid cap stocks on a market capitalization weighted basis.

It suits long-term investors who want to diversify across emerging market equities while reducing fossil fuel exposure and reflecting a climate and ESG perspective.

This is a passively managed (index tracking) ETF run by State Street.

The fund holds the remaining constituents of the MSCI Emerging Markets Index, after excluding companies with fossil fuel reserves, in proportion to their market capitalization weights. It invests most of its total assets in index securities and depositary receipts, and as a non-diversified fund, the weights of some large holdings can be relatively high.

• Screens out companies holding fossil fuel reserves
• Broad diversified exposure to emerging markets

Assets under management (AUM) stand at $173.0M, and the total expense ratio is 0.30% per year.

The fund moves in line with emerging market equities, so it tends to be quite volatile depending on macro variables such as US interest rates, a stronger dollar, and China's economy. Because the fossil fuel screen lowers the energy sector weighting, its trend can diverge from that of the standard emerging markets index.

Fund flows are affected by demand for ESG and climate themes, and the direction of flows tends to shift with changes in overall risk appetite toward emerging markets and with dollar movements. Its size is relatively small compared with similar broad emerging market ETFs.

Its strengths are the fossil fuel exclusion screen and emerging market diversification, while its weaknesses are the volatility typical of emerging markets, along with currency and concentration risks.

FNDE, PXH, XSOE and the others shown in the table are comparison targets in the same emerging market category, each using a different methodology such as fundamental weighting or the exclusion of state-owned enterprises. For lower-cost exposure to emerging markets overall without the fossil fuel exclusion, there are broad core ETFs such as IEMG and VWO. You can also consider EEM for its large trading liquidity, and ESGE if you want a broader reflection of ESG preferences.

Here are the points to review before investing in EEMX. It is an emerging market ETF with a distinct fossil fuel exclusion feature, but it is wise to check the management fee, emerging market risks, currency exposure, and holdings concentration before buying.

Political and currency risks specific to emerging markets, together with exchange rate swings, are the main drivers of short-term volatility. As a non-diversified fund, it carries large weights in top holdings and countries and can be exposed to shocks in specific markets.

It is a suitable choice for investors who want to diversify across emerging markets while reducing fossil fuel exposure. If cost and liquidity are the priority, it is better to decide after comparing it with broad core ETFs such as IEMG, VWO, and EEM.