LCTU vs. LDEM

Last updated Jun 16, 2026

LCTU (BlackRock U.S. Carbon Transition Readiness ETF) and LDEM (iShares ESG MSCI EM Leaders ETF) are both exchange-traded funds - LCTU is a ESG fund actively managed by BlackRock, while LDEM is a Emerging Markets Equities fund tracking the MSCI EM Extended ESG Leaders 5% Issuer Capped Index. LCTU is actively managed, while LDEM is passively managed. Over the past 5 years, LCTU returned 12.39%/yr vs 2.60%/yr for LDEM. A 0.59 correlation means they provide meaningful diversification when combined. LCTU charges 0.15%/yr vs 0.16%/yr for LDEM.

Performance

LCTU vs. LDEM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in BlackRock U.S. Carbon Transition Readiness ETF (LCTU) and iShares ESG MSCI EM Leaders ETF (LDEM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, LCTU achieves a 9.23% return, which is significantly higher than LDEM's 8.26% return.

LCTU

• 1D: 1.73%
• 1M: 2.67%
• YTD: 9.23%
• 6M: 9.49%
• 1Y: 25.98%
• 3Y*: 19.96%
• 5Y*: 12.39%
• 10Y*: —

LDEM

• 1D: 2.52%
• 1M: 3.00%
• YTD: 8.26%
• 6M: 9.66%
• 1Y: 24.07%
• 3Y*: 13.85%
• 5Y*: 2.60%
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

LCTU vs. LDEM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021
LCTU BlackRock U.S. Carbon Transition Readiness ETF	9.23%	16.96%	24.00%	25.38%	-20.02%	17.74%
LDEM iShares ESG MSCI EM Leaders ETF	8.26%	32.49%	5.87%	6.49%	-22.46%	-6.83%

Correlation

The correlation between LCTU and LDEM is 0.70, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.70
Correlation (3Y) Calculated over the trailing 3-year period	0.60
Correlation (5Y) Calculated over the trailing 5-year period	0.60
Correlation (All Time) Calculated using the full available price history since Apr 8, 2021	0.59

The correlation between LCTU and LDEM shifts across timeframes, from 0.59 (all time) to 0.70 (1 year), reflecting how their relationship changes across market environments.

LCTU vs. LDEM - Sectors Allocation Comparison

Sectors	LCTU	LDEM
Technology	37.8%	25.9%
Financial Services	11.3%	24.7%
Consumer Cyclical	10.3%	12.6%
Communication Services	9.9%	10.6%
Healthcare	8.6%	2.6%
Industrials	8.3%	5.5%
Consumer Defensive	4.5%	2.9%
Energy	3.0%	4.2%
Utilities	2.3%	1.9%
Real Estate	2.2%	1.4%
Basic Materials	1.9%	6.4%

Return for Risk

LCTU vs. LDEM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

LCTU

LCTU Risk / Return Rank: 66
LCTU Sharpe Ratio Rank: 67
LCTU Sortino Ratio Rank: 65
LCTU Omega Ratio Rank: 66
LCTU Calmar Ratio Rank: 60
LCTU Martin Ratio Rank: 70

LDEM

LDEM Risk / Return Rank: 39
LDEM Sharpe Ratio Rank: 38
LDEM Sortino Ratio Rank: 37
LDEM Omega Ratio Rank: 40
LDEM Calmar Ratio Rank: 39
LDEM Martin Ratio Rank: 39

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

LCTU vs. LDEM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for BlackRock U.S. Carbon Transition Readiness ETF (LCTU) and iShares ESG MSCI EM Leaders ETF (LDEM). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	LCTU	LDEM	Difference
Sharpe ratio: Return per unit of total volatility	2.05	1.28	+0.77
Sortino ratio: Return per unit of downside risk	2.80	1.81	+0.98
Omega ratio: Gain probability vs. loss probability	1.37	1.25	+0.12
Calmar ratio: Return relative to maximum drawdown	2.78	1.83	+0.95
Martin ratio: Return relative to average drawdown	12.10	5.76	+6.34

LCTU vs. LDEM - Sharpe Ratio Comparison

The current LCTU Sharpe Ratio is 2.05, which is higher than the LDEM Sharpe Ratio of 1.28. The chart below compares the historical Sharpe Ratios of LCTU and LDEM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

LCTU vs. LDEM - Drawdown Comparison

The maximum LCTU drawdown since its inception was -25.93%, smaller than the maximum LDEM drawdown of -40.82%. Use the drawdown chart below to compare losses from any high point for LCTU and LDEM.

Drawdown Indicators

	LCTU	LDEM	Difference
Max Drawdown Largest peak-to-trough decline	-25.93%	-40.82%	+14.89%
Max Drawdown (1Y) Largest decline over 1 year	-9.38%	-13.21%	+3.83%
Max Drawdown (3Y) Largest decline over 3 years	-19.83%	-15.12%	-4.71%
Max Drawdown (5Y) Largest decline over 5 years	-25.93%	-39.17%	+13.24%
Current Drawdown Current decline from peak	-0.57%	-2.72%	+2.15%
Average Drawdown Average peak-to-trough decline	-6.29%	-17.30%	+11.01%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.15%	4.19%	-2.04%

Volatility

LCTU vs. LDEM - Volatility Comparison

The current volatility for BlackRock U.S. Carbon Transition Readiness ETF (LCTU) is 4.49%, while iShares ESG MSCI EM Leaders ETF (LDEM) has a volatility of 8.65%. This indicates that LCTU experiences smaller price fluctuations and is considered to be less risky than LDEM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	LCTU	LDEM	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.49%	8.65%	-4.16%
Volatility (6M) Calculated over the trailing 6-month period	10.05%	15.64%	-5.59%
Volatility (1Y) Calculated over the trailing 1-year period	12.76%	18.96%	-6.20%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.23%	19.34%	-2.11%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.04%	20.87%	-3.83%

LCTU vs. LDEM - Expense Ratio Comparison

LCTU has a 0.15% expense ratio, which is lower than LDEM's 0.16% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

LCTU vs. LDEM - Dividend Comparison

LCTU's dividend yield for the trailing twelve months is around 1.15%, less than LDEM's 3.83% yield.

Position	TTM	2025	2024	2023	2022	2021	2020
LCTU BlackRock U.S. Carbon Transition Readiness ETF	1.15%	1.02%	1.27%	1.46%	1.63%	2.20%	0.00%
LDEM iShares ESG MSCI EM Leaders ETF	3.83%	3.26%	2.64%	3.20%	4.93%	1.82%	1.89%

Frequently Asked Questions

Can I hold both LCTU and LDEM in my portfolio?

LCTU and LDEM have a correlation of 0.70, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, LCTU or LDEM?

LDEM has higher volatility (8.65%) compared to LCTU (4.49%). In terms of maximum drawdown, LCTU dropped -25.93% vs LDEM's -40.82%.

Which ETF is better, LCTU or LDEM?

On 5-year performance, LCTU leads with 12.39% vs 2.60% for LDEM. On fees, LCTU is cheaper at 0.15% per year. On volatility, LCTU has been the lower-risk option at 4.49%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, LCTU or LDEM?

Over the 5-year period, LCTU has performed better with a 12.39% return vs 2.60%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, LCTU or LDEM?

LCTU is cheaper with a 0.15% expense ratio, compared with 0.16% for LDEM.

Which ETF pays a higher dividend yield, LCTU or LDEM?

LDEM has the higher dividend yield at 3.83%, compared with 1.15% for LCTU.

What is the main difference between LCTU and LDEM?

LCTU is categorized as ESG, while LDEM is Emerging Markets Equities. They also come from different issuers: BlackRock and iShares. Their fees differ too: 0.15% for LCTU and 0.16% for LDEM.

Which has better risk-adjusted returns?

LCTU currently has the higher Sharpe Ratio (2.05 vs 1.28), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.