First Trust RiverFront Dynamic Emerging Markets ETF (RFEM)

ETF First Trust RiverFront Dynamic Emerging Markets ETF (RFEM) Overview

Profile:

• Focus: Emerging Markets Equities
• Asset Allocation: Primarily large-cap stocks (80%), with a small allocation to mid-cap (20%)
• Investment Strategy: Dynamic allocation based on quantitative models and fundamental analysis. Focuses on growth and value style factors.

Objective:

• To achieve long-term capital appreciation by investing in a diversified portfolio of emerging market equities.

Issuer:

• Company: First Trust Portfolios L.P.
• Reputation: First Trust is a reputable ETF provider with over $189 billion in assets under management.
• Reliability: The company has a strong track record of managing ETFs and mutual funds.
• Management: The ETF is managed by RiverFront Investment Group, a firm specializing in quantitative investment strategies.

Market Share:

• Approximately 0.4% of the Emerging Markets Equity ETF market.

Total Net Assets:

• Approximately $1.21 billion

Moat:

• Unique Strategy: Dynamic allocation approach based on quantitative models and fundamental analysis.
• Experienced Management: RiverFront Investment Group's expertise in quantitative strategies.
• Niche Focus: Large-cap emerging market equities with a growth and value focus.

Financial Performance:

• 3-year annualized return: 12.37%
• 5-year annualized return: 10.86%
• 10-year annualized return: 8.40%

Benchmark Comparison:

• Outperformed the MSCI Emerging Markets Index in the past 3 and 5 years, but underperformed in the past 10 years.

Growth Trajectory:

• Emerging markets are expected to experience long-term economic growth, potentially driving future returns.

Liquidity:

• Average Trading Volume: Approximately 300,000 shares
• Bid-Ask Spread: Tight, around $0.01 to $0.02

Market Dynamics:

• Economic growth in emerging markets, global trade, and geopolitical events can impact the ETF's performance.

Competitors:

• iShares Emerging Markets ETF (EEM) - 34.4% market share
• Vanguard FTSE Emerging Markets ETF (VWO) - 24.5% market share
• Xtrackers Emerging Markets Equity ETF (EMQQ) - 10.3% market share

Expense Ratio:

• 0.79%

Investment Approach and Strategy:

• Strategy: Dynamic allocation based on quantitative models and fundamental analysis. Does not track a specific index.
• Composition: Primarily large-cap stocks (80%), with a small allocation to mid-cap (20%). Focuses on growth and value style factors.

Key Points:

• Invests in a diversified portfolio of emerging market equities.
• Actively managed with a dynamic allocation approach.
• Seeks to outperform the benchmark index through active management.
• Relatively high expense ratio compared to some competitors.

Risks:

• Volatility: Emerging markets can be more volatile than developed markets.
• Market Risk: Political and economic instability in emerging markets can impact performance.
• Currency Risk: Fluctuations in currency exchange rates can affect returns.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to emerging market equities.
• Investors comfortable with higher volatility and risk.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

• Rating: 7.5/10
• Justification: RFEM offers a unique and actively managed approach to investing in emerging market equities. Its dynamic allocation strategy and experienced management team are strengths. However, the relatively high expense ratio and potential volatility are considerations. The long-term growth potential of emerging markets and the ETF's outperformance compared to its benchmark in recent years add to its appeal.

Resources and Disclaimers:

• Information gathered from ETF.com, First Trust Portfolios website, and Morningstar.
• This information is for educational purposes only and should not be considered investment advice. Investing involves risk, and you could lose money. Please consult with a financial advisor before making any investment decisions.