IShares ESG MSCI EM Leaders ETF (LDEM), once the second-largest ETF invested by Blackrock in sustainable emerging market companies, is no longer what it used to be.

In just two days, LDEM's total assets shrank by 91%, to $800m on Dec. 21, and to about $69 million on Dec. 24.

LDEM is a large ESG fund that tracks indices of large and medium-sized emerging market stocks that meet certain environmental, social and governance criteria. As soon as it was launched, it was supported by Ilmarinen, the oldest pension fund company in Finland. Ilmarinen invested US $600 million in the LDEM fund when it was established in February 2020, and achieved great success.

However, the sharp decline in LDEM's assets is also due to the pension company's choice of a big divestment. "We have decided to reduce our exposure to emerging market equities," Juha Venalainen, senior portfolio manager at Ilmarinen, told Reuters. Our view is that risks in this area may have increased. "

Ilmarinen also holds two similar funds, iShares ESG MSCI USA Leaders ETF (SUSL) and Xtrackers MSCI USA ESG Leaders Equity ETF (USSG), but neither has experienced significant outflows in recent weeks.

By the end of December 30, LDEM was down 3.5% this year to $57.70 a share.

LDEM underperformed the MSCI SEG and S & P 500 this year.

Blackrock's other fund, iShares ESG Aware MSCI EM ETF (ESGE), is still the largest ESG ETF, with assets of $6.2 billion. According to Blackrock, the assets of iShares global sustainable ETF and index funds have doubled year-on-year among more than 180 sustainable fund solutions.