EEMA vs XSOE

EEMABiShares MSCI Emerging Markets Asia ETF

XSOEAWisdomTree Emerging Markets ex-State-Owned Enterprises Fund

In short

EEMA Emerging markets, minus the detour. EEMA owns the Asian engine room (China, Taiwan, Korea, India) and skips Latin America and EMEA entirely, spread across roughly 900 large- and mid-cap names with caps on the giants.

XSOE One screen, applied hard: if a government owns more than 20% of a company, XSOE leaves it out. What is left is emerging markets minus the state champions, with country weights pushed back toward the standard EM mix.

Stated mandate

EEMA The fund seeks to track an index of large- and mid-cap equities from emerging Asian countries, providing diversified exposure to Asian emerging-market equities.

XSOE The fund seeks to track the investment results of emerging-market companies that are not state-owned enterprises, defined as companies with no more than 20% government ownership.

Why people hold it

• EEMA Pure emerging Asia: the index covers only EM Asian countries, so Taiwan, China, Korea and India carry the fund without Brazil or Saudi Arabia riding along.ishares.com
• The MSCI EM Asia Custom Capped Index limits any single issuer to 25% and all 5%-plus names to 25% combined, so one mega-cap chipmaker cannot quietly become the whole fund.mutualfunds.com
• Running since 2012 and holding roughly 900 large- and mid-cap stocks, it hews closely to the mandate on the tin and sits in the upper half of its emerging-markets peer group.

• XSOE The 20% government-ownership cutoff is an index rule, not a manager's judgment call, and the fund has run on it since its 2014 launch.wisdomtree.com
• 0.32% a year, under the typical fund in its emerging-markets peer group, for a screen most broad EM funds never apply.
• After the state-owned names come out, the index pushes country weights back toward where they started, so it stays a filtered EM portfolio rather than a country bet.wisdomtree.com
• A multi-billion-dollar fund spread across roughly 800 stocks, and it has tracked its index closely.

Worth knowing

• EEMA The 0.49% fee lands at the median for emerging-markets funds, while broad EM trackers like VEXC (0.07%) and BKEM (0.11%) charge a fraction of that.
• Asia-only means China and Taiwan do the heavy lifting. Peers such as XCEM and VEXC strip China out; this one leans in.
• Mid-sized and moderately traded rather than a mega-fund, so spreads can run wider than on the largest EM ETFs. It also distributes infrequently, not monthly.

• XSOE Cheaper broad EM shelf-mates exist (BKEM at 0.11%, XCEM at 0.16%). The screen is what you are paying the difference for.
• Government stakes cluster in banks and energy in EM, so removing them shifts the sector mix toward private-sector names. Expect it to behave differently from a plain EM index.wisdomtree.com
• No country is excluded, so China stays in the mix, unlike ex-China peers VEXC and XCEM. It also sits among the more volatile funds in its peer group.

Full EEMA profile⁠

Full XSOE profile⁠