Introduction

Investors can explore smaller emerging market stocks through the iShares MSCI Emerging Markets Small-Cap ETF (EEMS, $57.20), which tracks the MSCI Emerging Markets Small Cap Index.

The benchmark includes small-cap companies from 24 emerging markets, representing approximately 14% of each country's free float-adjusted market cap, with an average market cap of $1.4 billion.

Since its launch in August 2011, the ETF has seen an annual total return of 4.0%. In recent years, EEMS has shown strong returns, with an average annual total return of 16.1% between 2019 and 2021, all three years ending positively.

With around 1,580 holdings and $353.5 million in total net assets, EEMS top 10 holdings make up 3% of its portfolio, and it has an annual turnover rate of 43%.

Although not entirely focused on small-cap stocks, the EEMS portfolio consists of 27% small-cap and micro-cap stocks, 62% mid-caps, and the rest in large caps.

The top three sectors by weight in the ETF are technology (17.6%), industrials (16.7%), and material stocks (12.3%). In terms of countries, India (25.6%), Taiwan (22.2%), and South Korea (13.3%) make up the largest weights for the iShares MSCI Emerging Markets Small-Cap ETF.