The Fidelity Targeted Emerging Markets Factor ETF (FDEM) tracks a proprietary index of emerging markets stocks that have attractive valuations, high quality profiles, positive momentum, and lower volatility than the broader market. With about 200 stocks, FDEM has a shallower portfolio when compared with some competing factor funds, making it less appealing as a standalone core emerging market holding.
The Fidelity Targeted Emerging Markets Factor ETF (FDEM) tracks a proprietary index of emerging markets stocks that have attractive valuations, high quality profiles, positive momentum, and lower volatility than the broader market. With about 200 stocks, FDEM has a shallower portfolio when compared with some competing factor funds, making it less appealing as a standalone core emerging market holding.
Investors should note that FDEM includes South Korea. Some issuers classify South Korea in with developed markets. Unsuspecting investors who mix and match funds from different firms may find themselves either unintentionally overweight South Korea or missing out on the country entirely.
FDEM is reasonably priced for a smart-beta approach to emerging markets, though it’s still more expensive than ultra-low-cost plain vanilla rivals like the iShares Core MSCI Emerging Markets ETF (IEMG) and the Vanguard FTSE Emerging Markets ETF (VWO), which lack fancy factors but offer similar exposure and great liquidity at a fraction of the price. There’s also competition to consider in the multi-factor space, including the Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM) or the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM).