Head of Exchange Traded Funds
• Active ETF in focus
Active Emerging Markets ETF: Stock selection for core EM exposure
3D EM Equity ETF
Active ETFs are giving investors a more flexible way to access active strategies, combining the transparency and tradability of an ETF with the ability to move beyond a purely passive approach.
In this series, we look at where that active element may be especially useful. This edition focuses on emerging market equities: a complex and often inefficient asset class where disciplined stock selection and portfolio construction can make a meaningful difference.
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Portfolio Manager
Summary
Emerging markets are an important part of the global equity conversation. The asset class offers access to long-term growth, innovation leadership and broadening domestic demand, while many EM economies are also supported by stronger fundamentals than in previous cycles.
Figure 1 | Third year in a row of earnings growth for EM
Source: MSCI, IBES, 30 July 2026. All expressions of opinion are subject to change. This information is intended for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products or services.
These factors help explain why EM remains a core allocation question. But the next question is how investors should access that opportunity. Emerging markets are not one single story: they bring together countries, sectors and companies with very different growth drivers, risks and market dynamics. At the same time, the index itself has changed considerably, making the composition of EM exposure increasingly important.
Figure 2 | MSCI EM index weights 2008 vs. 2025
Source: MSCI, December 2025.
The shift from resource-heavy sectors toward technology, consumer and communication services shows how much index composition has changed. For investors, this makes benchmark awareness important: the opportunity set has become more dynamic, but so have the risks of unintended country, sector or stock concentrations.
Why EM rewards stock selection
This is where a benchmark-aware active approach can be especially useful, with the opportunity lying in selecting the right stocks within the countries and sectors that make up that benchmark, because even within a single theme, outcomes can vary widely.
Take the EM tech sector, for example. AI hardware, semiconductors, platforms and digital infrastructure may all sit within the broader EM innovation story, but individual stock returns, valuations, earnings momentum and quality can diverge sharply. That dispersion creates room for active stock selection, even when country and sector positioning remains controlled.
Figure 3 | Wide dispersion creates room for stock selection
Past performance does not guarantee future results. The value of investments may fluctuate. All companies named are for illustrative purposes only. No inference can be made on the future development of any company. This is not a buy, sell or hold recommendation. Source: Bloomberg, Robeco. As of 3 September 2026. Local total stock returns for Taiwanese and Korean tech stocks in Robeco’s EM Active universe.
For a core EM allocation, the key question for investors is whether their portfolio is built to use stock-level dispersion while keeping country and sector exposures under control.
Why Robeco’s 3D approach fits EM
Robeco’s 3D EM Equity ETF is designed as a systematic alternative to passive EM exposure: broad market access, but with a disciplined active edge.
Instead of making large country or sector calls, the strategy invests in a diversified portfolio of EM stocks using many small overweight and underweight positions versus the benchmark. This keeps the portfolio aligned with the role investors typically expect from a core EM allocation, while seeking to improve outcomes over time.
The 3D framework means the portfolio is not optimized for return alone. Return potential, benchmark-relative risk and sustainability profile are considered together, so the strategy can seek attractive stocks while managing active risk and targeting sustainability characteristics better than the benchmark. In EM, where companies can differ widely in governance standards, environmental footprints and long-term risks, that integrated approach is especially relevant.
The ETF has a long-term information ratio target of 0.6, reflecting its aim to deliver disciplined excess return while managing some of the risks that can come with broad passive exposure. Since inception, the ETF has also delivered positive gross excess returns versus the benchmark.
Figure 4 | Track record
Past performance is no guarantee of future results. The value of your investments may fluctuate. Source: Robeco, MSCI. Portfolio: Robeco 3D EM Equity UCITS ETF USD Acc Share Class. Index: MSCI Emerging Markets Index (Net Return) (net dividends reinvested). All figures in EUR. Data end of 31 July 2026. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Performance since inception is as of the first full month. Periods shorter than one year are not annualized. Returns gross of fees, based on gross asset value. Values and returns indicated here are before cost; the performance data does not take account of the commissions and costs incurred
Although the ETF’s track record is short, the strategy builds on Robeco’s broader enhanced indexing capability, which has been developed over more than 20 years.
How the investor benefits
1. Core EM equity exposure, actively enhanced
The ETF gives investors broad EM exposure in a transparent and flexible active ETF wrapper. It is designed for investors looking for a practical core EM allocation, but with more than simple market-cap-weighted access.
2. Diversified active edge
Because the strategy is built from many small active positions, investors are not dependent on a single theme or stock to drive returns. This can be especially useful in EM, where outcomes can vary widely even within the same sector or theme.
3. Benchmark-aware portfolio construction
The strategy is designed to manage concentration, volatility, liquidity and implementation costs while staying close to the benchmark. For investors, this means the EM allocation can retain its core portfolio role, while being actively shaped through Robeco’s integrated 3D process.
For investors seeking core EM exposure, Robeco's 3D EM Equity ETF combines the efficiency of the ETF wrapper with long-standing quantitative research and an integrated 3D investment process. This reflects the wider Robeco active ETF approach: systematic, research-driven and designed to evolve with investor needs.
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