The fund follows an index approach that selects large and mid cap emerging market companies that meet environmental, social and governance (ESG) criteria or show a trend toward reducing their carbon footprint. Rather than mechanically holding the entire market, it is a passive product that reflects a climate improvement perspective.

It suits long term investors who want emerging market equity exposure, who also take climate transition and sustainability criteria into account, and who can tolerate volatility.

This is an ETF managed by Xtrackers using a passive (index tracking) approach.

The EMCR ETF reflects the market characteristics of emerging market equities while applying environmental, social and governance (ESG) and climate improvement criteria to stock selection. Because carbon reduction and climate improvement criteria affect which stocks are included, its composition and sector exposure may differ from those of a general emerging market index.

• Emerging market exposure that reflects climate improvement screening criteria
• Potentially different sector composition from a general emerging market index

Assets under management (AUM) are $56.8M, and the total expense ratio is 0.15% per year.

Given its micro cap size, it is important to check trading volume and the bid-ask spread. Because the liquidity experience can differ between long term holding and short term trading, it is also worth reviewing your order method.

The performance of emerging market equities is influenced by global risk appetite, dollar movements, regional economic conditions and the relative performance of the technology and financial sectors. Depending on the market phase, climate transition criteria can produce relative performance that differs from general emerging market equities, so short term fluctuations should be interpreted separately.

Fund flows are affected by emerging market risk appetite, interest in sustainable investing and trading conditions. For micro cap products, the bid-ask spread can change when trading participation is concentrated, so it is more reasonable to check the actual trading environment alongside inflows or outflows themselves.

While its emerging market exposure reflecting climate transition criteria is a strength, screening criteria and regional and currency variables may lead to performance that differs from general emerging market ETFs.

The ESGD ETF, ESGE ETF and VSGX ETF in the comparison table reflect environmental, social and governance (ESG) criteria, but they differ from one another in regional scope and management approach. The KLMN ETF and KLMT ETF may also look similar in their climate theme approach, but they cannot be considered to have the same investment universe as the emerging market focused EMCR ETF. Compare fees, assets under management, climate screening methods, distribution policy and trading conditions together, and review them against your own regional diversification goals and tolerance for volatility.

Before investing, you should check whether the climate screening criteria fit your investment principles and how its regional and sector composition may differ from general emerging market equities. Because this is a micro cap ETF, it is also advisable to review your order method and trading conditions in advance.

Emerging market equities can be affected by exchange rates, liquidity, policy and geopolitical variables, and during periods of market stress, both the underlying assets and ETF trading conditions can be shaken together. Environmental, social and governance (ESG) and carbon screening criteria can narrow the investable universe, so there is also a possibility of lagging a broad emerging market index.

The EMCR ETF can be considered by those who want to reflect carbon reduction and climate improvement criteria within their emerging market investing. However, after understanding the trading conditions of a micro cap product, the annual distribution structure, and the composition and performance characteristics that may differ from a general emerging market index, you should decide its weighting within your long term asset allocation.