What do you get versus what you may want with EM ETF's

If you buy the most liquid equity emerging markets ETF (EEM), you will be purchasing an Asian-centric portfolio with over 1/3 of your exposure in China and over 60% in just three countries, China, Taiwan, and South Korea, and over 80 percent in Asia.  

On the other hand, if you buy the leading emerging market bond ETF (EMB), you are holding a very different regional exposure. An investor will hold 4.5 times as much LATAM and less than 1/5 of the exposure in Asia. There is more diversification of country exposure in the bond ETF, but the country mix is very different from the equity ETF. 

Both ETFs reflect the exposures in their respective equity and benchmarks. There is no hiding what the ETF will represent. There is complete transparency with the exposures, yet retail flows may not be aware of the regional bets taken. Holding a mix of equity and bond EM ETF or benchmark exposures give very different geographical exposure. The bond benchmark will grow with the amount of debt being issued. More leverage will increase EM bond exposure. More equity growth with increase the country equity exposures. 

The issue of what you are buying with these ETF's is not limited to regions. In the case of EMB, there is a mix between investment grade and high yield, respectively 60% and 40%. Most of what is being purchased is sovereign bonds and not corporates. For equity investors, buying EEM is not an EM commodity play given the diversification of sectors. 

Given the mix of assets, any quick purchases may generate surprises for investors who don't think through the portfolio exposures gained.