iShares Currency Hedged MSCI Emerging Markets ETF

iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) is a fund of funds. It owns the iShares MSCI Emerging Markets ETF and adds currency contracts that aim to cancel out swings between emerging-market currencies and the US dollar. The hedge is what sets it apart. It tends to help when the dollar strengthens and to hold returns back when those currencies rise. The cost is 0.72% a year.

• Over the year to Oct 27, 2026, HEEM returned +16.4%, 1st of 8 among similar funds.
• Its 5-year annualized return was +8.8% and its 10-year +9.1%.
• In the 2020 COVID crash it fell 26.3% and regained its old high 3.4 months after the low.
• Its worst full calendar year was 2022 (-16.8%); its best was 2025 (+34.0%).
• The deepest fall in its price history was 33.4% (Feb 17, 2021 to Oct 24, 2022), recovered by Jun 30, 2025.

As of Aug 31, 2026, the fund held 1 securities; the ten largest made up 101.46% of assets.

• Over the three months to Aug 31, 2026, investors added a net $26.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.36%, -8.02%, +3.19%.

HEEM tracks the MSCI Emerging Markets 100% Hedged to USD Index, which comes from MSCI. As of Aug 31, 2025, the index held large and mid-sized companies from 24 emerging countries or regions, including China, India, Taiwan, South Korea, Brazil and Saudi Arabia. Consumer goods and services, financials and technology made up a large share. BlackRock runs it as an index fund. It does not try to beat the index or move to cash when markets fall.

HEEM is a fund of funds. Instead of buying stocks directly, it puts most of its money in another iShares fund, the iShares MSCI Emerging Markets ETF. As of Aug 31, 2026, that fund made up about 101% of net assets. The 172 currency contracts were valued at about -1.5%, which offset the extra. Both funds use "representative sampling." That means they hold a sample of stocks picked to match the index's size, sector and other traits, rather than every stock in the index.

The hedge uses currency forward contracts. These are agreements to exchange currencies at a set rate on a future date. Each month the fund in effect sells forward the full value of its non-dollar holdings at a one-month rate, then resets. Some contracts are non-deliverable forwards, which settle in dollars without swapping the currencies themselves. The hedge may not fully remove currency effects, and it does nothing to soften stock-market losses.

• HEEM charges 0.72% a year, versus an average of 0.86% for the similar funds below (1st of 8, cheapest first).
• Of that, 0.78% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.79% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $74 in the first year and $1,415 over 10 years (assuming a 5% annual return).

HEEM holds only emerging-market stocks and has fallen by a third at its worst, so it fits best as a small growth slice rather than a foundation.

HEEM gives a portfolio emerging-market stocks with most currency swings removed, but it is still a volatile stock fund. It fell 26.3% in the 2020 COVID crash and recovered in about 3.4 months. In the 2022 bear market it fell 25.1% and took about 21 months to recover. Its deepest drop was 33.4%, from February 2021 to October 2022. It did not fully recover until June 30, 2025, about 32 months later. Its worst calendar year was 2022, with a loss of 16.37%. The fund launched in 2014, so it has no record from 2008. Anyone who has to sell shares or draw income during a slump could lock in losses.

The trailing 12-month yield was 3.37% as of Oct 27, 2026, paid twice a year. The 0.72% expense ratio comes to about $74 in the first year on $10,000 in the SEC's standard example. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by other buffer (defined-outcome) funds, largest first.