First Trust's AFDM and AFEM summary prospectuses take effect, still printing the 2016 record
First Trust Exchange-Traded Fund III's Form 497Ks for AFDM and AFEM took effect Monday, September 14, 2026, restating expenses at 0.80% for AFDM and 0.85% for AFEM.
The summary prospectuses now in force for two First Trust international equity funds still print returns that begin in 2016, generated under a process the documents no longer describe. The papers, dated Friday, September 11, confirm that the funds changed their names, tickers, and principal strategies that day and dropped their sub-advisor. They also warn that results from before that date are not necessarily indicative of how the funds will perform under the current strategies.
The developed-market international fund, the First Trust Active Factor International ETF AFDM, and the emerging-markets fund, the First Trust Active Factor Emerging Markets ETF AFEM, are the same legal series that closed Friday as RFDI and RFEM. The new short forms describe the holders of those two books: $168 million in the international series and $85 million in emerging markets as of September 10. The performance tables still run from the series' inception dates, April 13, 2016, and June 14, 2016.
AFDM and AFEM fees and the factor process
On Thursday, July 2, First Trust said it would cut the international series' management fee from 0.83% to 0.80% of average daily net assets, and the emerging-markets series' from 0.95% to 0.85%. Monday's papers restate both the management fee and total annual operating expenses at those new levels. The international fund's portfolio turnover was 3% in the most recent fiscal year; the emerging-markets fund's was 4%. Both warn that Friday's strategy change may produce higher turnover this fiscal year. The papers say a higher turnover rate can mean higher transaction costs and, in a taxable account, higher taxes.
First Trust Advisors L.P. manages both through its Investment Committee. Both funds are actively managed. Under normal market conditions they will invest at least 80% of net assets in their stated markets: developed-market international equities listed on U.S. and non-U.S. exchanges for AFDM, and securities of emerging-market companies for AFEM. They rely primarily on a multi-factor quantitative process that may take into account value, momentum, quality, and low volatility. The advisor can change those factors.
Frequently asked
What changed about these funds?
They changed names, tickers and principal strategies and dropped their sub-advisor, though they remain the same legal series that previously traded as RFDI and RFEM.
Why does the performance history go back to 2016?
The tables still run from the series' inception dates, because these are the same legal series, and the papers warn that prior results are not necessarily indicative of performance under the current strategies.
What do the funds cost now?
Management fees and total annual operating expenses are restated at 0.80% for AFDM and 0.85% for AFEM.
How are the funds run?
First Trust Advisors manages both actively through its Investment Committee, relying primarily on a multi-factor quantitative process that may consider value, momentum, quality and low volatility, with at least 80% of net assets in their stated markets.