iShares MSCI Emerging Markets ETF (EEM) is one of the most popular exchange-traded funds in the world. The fund offers investors exposure to over 800 companies in fast-growing nations, such as Taiwan, India, Hong Kong, China, Brazil, and South Korea.

EEM is balanced, although it consists primarily of stocks with large market capitalisation. Because it is an actively managed portfolio, EEM has a slightly higher expense ratio than most ETFs.

Over 70% of EEM holdings are in these five sectors: financial services, technology, consumer cyclical, communication services, and basic materials.

EEM is a highly liquid, highly volatile ETF. Like most other emerging markets funds, this fund consists of high-risk, high-return stocks. Share prices can skyrocket and plummet just as fast. Here are some factors that may trigger those moves:

More than half of EEM's holdings is from emerging Asian nations. Asian countries reporting strong economic growth create demand for EEM, increasing its price. On the other hand, political instability in that region, such as the China-Taiwan conflict, can devalue the fund.

Key advancements or setbacks in the main sectors listed above can cause the price of EEM to rise or fall.

Trading ETFs reduces your risk exposure to major price shocks from a single stock. However, the earnings reports of the top 10 companies in EEM's composition can generate a price increase or decrease.

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