Emerging Markets Growth

Aggressive Thematic

EM demographics are unbeatable — young populations, rising middle class, urbanization. India and Southeast Asia are where China was 15 years ago. Cheap valuations are a bonus.

4
ETFs
2%
Aggregate Yield
$74.3B
Wtd Avg AUM

Holdings

Symbol Name Weight Price 1D 3M YTD Yield AUM
IEMG iShares Core MSCI Emerging Markets ETF 35% $74.25 ... ... ... 2.5% $144.1B
INDA iShares MSCI India ETF 25% $49.36 ... ... ... — $7.1B
EEM iShares MSCI Emerging Markets ETF 20% $60.55 ... ... ... 2.0% $26.8B
ITOT iShares Core S&P Total U.S. Stock Market ETF 20% $148.68 ... ... ... 1.1% $83.4B

Investment Thesis

Emerging markets represent 85% of the world's population and 60% of global GDP growth, yet they constitute less than 12% of global stock market capitalization. The demographic dividend is real: India's median age is 28 (vs 38 in the US and 49 in Japan), creating decades of workforce growth and consumer spending expansion. The overweight in India reflects its unique position — the world's fastest-growing large economy with improving governance, digital infrastructure, and a manufacturing base that's absorbing supply chains diversifying away from China. The broad EM allocation (IEMG) captures the full opportunity set including Taiwan's semiconductor industry, Brazil's commodities, and Southeast Asian growth stories. The 20% US anchor provides stability and reduces EM-specific risks like currency depreciation and political instability.

Portfolio Construction

IEMG iShares Core MSCI Emerging Markets ETF
35%
Broad emerging markets equity — covers 26 countries including China, India, Taiwan, South Korea, and Brazil. Over 2,500 stocks providing deep diversification across the developing world.
Yield: 2.5% AUM: $144.1B
INDA iShares MSCI India ETF
25%
India — the fastest-growing large economy in the world. Young demographics, digital transformation, and a manufacturing boom driven by supply chain diversification from China.
AUM: $7.1B
EEM iShares MSCI Emerging Markets ETF
20%
EM large-caps for liquidity — focuses on the largest, most liquid emerging market stocks. Heavier in mega-caps like TSMC, Samsung, and Tencent than the broader IEMG allocation.
Yield: 2.0% AUM: $26.8B
ITOT iShares Core S&P Total U.S. Stock Market ETF
20%
US equity anchor for stability — provides a developed market ballast against EM-specific risks like currency depreciation, political instability, and capital controls.
Yield: 1.1% AUM: $83.4B

Key Considerations

  • EM stocks have dramatically underperformed US stocks for over a decade
  • Currency risk can overwhelm stock returns — EM currencies tend to depreciate vs the dollar
  • Geopolitical risk is elevated (China-Taiwan, Russia sanctions, Middle East instability)
  • Liquidity is lower and corporate governance weaker than in developed markets
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