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BlackRock to launch new ETF

BlackRock Australia has announced it will launch the iShares MSCI Emerging Markets ex China ETF (ASX: EMXC) with a management fee of 0.25%.

BlackRock said the launch of EMXC furthers its commitment to expand its local iShares product suite, providing Australian advisers and investors with a "granular building block" for more precise emerging markets allocations.

EMXC will be available on the ASX later this month and aims to offer Australian investors a higher allocation to the emerging markets universe outside of China.

The ETF also seeks to mitigate the high concentration of China within the composition of the MSCI Emerging Markets Index, enabling investors to maintain their exposure to emerging markets while having greater flexibility in their China allocation.

"EMXC will offer Australian advisers and investors with a more granular building block that provides greater flexibility in managing allocations to China and other emerging markets," BlackRock Australasia head of wealth Chantal Giles said.

"Historically, investors have often viewed emerging markets as a single asset class. However, this perspective has evolved. There is now growing interest in country-specific allocations, such as China or India, in addition to broad emerging market exposures. This shift enables investors to make more precise investment decisions, considering macroeconomic factors, risk management, and portfolio diversification.

"EMXC offers investors the opportunity to better reflect their individual preferences and convictions regarding China within their emerging markets allocation."

BlackRock Australasia iShares ETF and index investment specialist Tamara Stats said while investors often have specific investment views on China, there is a broad range of opportunities across emerging markets outside China that may warrant a separate allocation.

"As supply chains are globally rewired, countries such as India, Mexico, and Brazil are capitalising on reshoring or friendshoring, while South Korea has increased its market share in battery manufacturing. This represents a structural long-term change which has traditionally favoured China only, but now we see a broader base of EM countries benefiting from this shift," Stats said.

"EMXC offers Australian advisers and investors the choice to capture this opportunity set, providing the potential for higher returns that are uncorrelated to developed markets and serving as a source of portfolio diversification."

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