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Diversify Concentrated EEM With INDY, Amid AI Broadening ...
Chetan Woodun · 2026-06-20 · via All Articles on Seeking Alpha

Summary

  • The iShares MSCI Emerging Markets ETF (EEM) has surged over 50% but now faces high concentration risk in East Asian semiconductor stocks.
  • I emphasize the iShares India 50 ETF (INDY) as a diversifier, given its inverse correlation to EEM and exposure to India's domestic growth drivers.
  • INDY stands to benefit from easing oil prices, AI adoption in financials, and structural reforms, supporting its premium valuation versus EEM.
  • I maintain a hold on EEM due to volatility and recommend INDY for risk mitigation, while monitoring geopolitical and global risk-off events.
Globe East and Southeast Asia

fpdress/iStock via Getty Images

The iShares MSCI Emerging Markets ETF (EEM), which tracks the performance of equities in developing economies, has surged by over 50% in the past year, as shown in the chart below, helped mainly by the AI trade.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing.

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