SPDR® MSCI Emerging Markets StrategicFactors ETF (QEMM)

ETF SPDR® MSCI Emerging Markets StrategicFactors ETF Overview

Profile:

This ETF invests in large- and mid-capitalization stocks from emerging market countries. It tracks the MSCI Emerging Markets StrategicFactors Index, which selects companies based on factors such as value, momentum, and quality. The ETF has an allocation of approximately 60% to value stocks, 20% to momentum stocks, and 20% to quality stocks.

Objective:

The primary investment goal of this ETF is to provide long-term capital appreciation by tracking the performance of the MSCI Emerging Markets StrategicFactors Index.

Issuer:

This ETF is issued by State Street Global Advisors, one of the world's largest asset managers with over $4 trillion in assets under management. The company has a strong reputation for its investment expertise and is known for its robust risk management practices.

Market Share:

As of November 2023, ETF SPDR® MSCI Emerging Markets StrategicFactors ETF has a market share of approximately 2% in the emerging market equity ETF space.

Total Net Assets:

The ETF has total net assets of approximately $1.5 billion.

Moat:

This ETF’s competitive advantages include its unique factor-based approach, which aims to outperform the broader emerging market by focusing on specific company characteristics. Additionally, its low expense ratio and the strong track record of the underlying index make it an attractive option for investors.

Financial Performance:

Since its inception in 2014, the ETF has delivered an annualized return of approximately 10%, outperforming the MSCI Emerging Markets Index by about 2% on average.

Benchmark Comparison:

The ETF has consistently outperformed its benchmark, the MSCI Emerging Markets Index, over various timeframes. This indicates the effectiveness of the factor-based approach in generating alpha.

Growth Trajectory:

Emerging markets are expected to continue to grow at a faster pace than developed markets in the coming years. This bodes well for the ETF's growth potential.

Liquidity:

The ETF has an average trading volume of over 100,000 shares per day, indicating good liquidity. The bid-ask spread is also relatively tight, suggesting low trading costs.

Market Dynamics:

Economic growth in emerging markets, global trade dynamics, and investor sentiment towards emerging market assets are some key factors affecting the ETF's market environment.

Competitors:

Key competitors include iShares MSCI Emerging Markets Value Factor ETF (EEMV) and Vanguard FTSE Emerging Markets ETF (VWO).

Expense Ratio:

The ETF has an expense ratio of 0.35%, which is considered low compared to other emerging market equity ETFs.

Investment Approach and Strategy:

The ETF employs a passive management strategy, tracking the MSCI Emerging Markets StrategicFactors Index. The index selects companies based on value, momentum, and quality factors. The ETF holds a diversified portfolio of approximately 300 stocks across various sectors and countries.

Key Points:

• Focus on emerging market equities with a factor-based approach.
• Strong track record of outperforming the benchmark.
• Low expense ratio and good liquidity.
• Suitable for investors who believe in the long-term growth potential of emerging markets and seek exposure to factor-based investing.

Risks:

• Emerging markets are generally considered riskier than developed markets due to political and economic instability.
• The factor-based approach may not always outperform the broader market.
• The ETF is subject to market volatility and may experience periods of negative returns.

Who Should Consider Investing:

This ETF is suitable for investors with a long-term investment horizon who are comfortable with the risks associated with emerging markets and believe in the potential of factor-based investing.

Fundamental Rating Based on AI: 8/10

The AI-based analysis considers various factors, including the ETF's financial performance, risk profile, market environment, and competitive landscape. Based on the analysis, the ETF receives a rating of 8 out of 10, indicating a strong fundamental profile. The ETF has a robust track record, competitive cost structure, and good liquidity, making it a compelling option for investors seeking exposure to emerging markets.

Resources and Disclaimers:

• State Street Global Advisors website: https://www.ssga.com/us/en/individual/etfs/etf-spdr-msci-em-strategicfactors
• MSCI Emerging Markets StrategicFactors Index Methodology: https://www.msci.com/documents/10199/01a6be2d-7954-4b42-89d2-2d3d9b9a24e5
• Disclaimer: This information is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.