What to Consider Before Adding This Emerging Markets ETF to Your Portfolio

The iShares Core MSCI Emerging Markets ETF (IEMG) has significantly outperformed the S&P 500 over the past year, returning 43% versus 24%, driven by attractive valuations and faster economic growth in countries like Taiwan, South Korea, and India. However, investors should carefully consider China's 18% weighting in the fund, as the country faces headwinds from real estate weakness, geopolitical risks, and demographic challenges. While China's influence on emerging market indexes has diminished, some exposure remains warranted given its status as a major global economy.