EMGF vs FEM

EMGFAiShares Emerging Markets Equity Factor ETF

FEMCFirst Trust Emerging Markets AlphaDEX Fund

In short

EMGF Emerging markets, sorted by factor screen instead of straight market cap. EMGF holds roughly 700 large- and mid-cap EM stocks picked for style-factor exposure, and charges 0.26% doing it, about half the multifactor EM norm.

FEM A 2011-vintage take on emerging markets that skips cap-weighting: it ranks stocks on growth and value factors, keeps the top scorers, and weights them in tiers, so the megacap giants don't run the portfolio. The fee sits at the high end.

Stated mandate

EMGF EMGF seeks to follow an index of large- and mid-capitalization emerging-market stocks selected for favorable exposure to specified style factors, subject to constraints.

FEM The fund seeks results that generally correspond, before fees and expenses, to the price and yield of the Nasdaq AlphaDEX Emerging Markets Index. It normally invests at least 90% of net assets in index securities and uses indexing to replicate the index.

Why people hold it

• EMGF 0.26% a year, versus a 0.48% median across multifactor EM funds. It undercuts AVES, JPEM, ROAM and QEMM on fee.
• Roughly 700 large- and mid-cap names, so the factor tilts sit on a broad base rather than a handful of concentrated bets.
• Running since 2015 as a billion-dollar-plus iShares fund, with steady enough volume for routine retail orders.
• On cost and ease of trading, one of the stronger builds in the multifactor emerging-markets group.

• FEM Ranks emerging-market stocks on growth and value factors, then weights the survivors in tiers, so the strongest scorers carry more weight than size alone would give them.nasdaqomx.com
• Holds roughly 160 names under tiered equal weighting, leaving more room for mid-size and smaller companies than a cap-weighted EM benchmark.nasdaqomx.com
• Running since 2011 through several EM cycles, with at least 90% of net assets in index securities and cash paid out quarterly.
• A few hundred million in assets and moderate volume: no giant, but an established fund rather than a launch-stage one.

Worth knowing

• EMGF Factor tilts mean the portfolio can drift well away from a plain cap-weighted EM index, in either direction, for long stretches.ishares.com
• Emerging-market equity carries currency swings and country-level political risk on top of normal stock risk. Volatility here sits at the rougher end of its peer group.ishares.com
• Distributions land annually or semiannually, not monthly, so it is not built as an income drip.

• FEM At 0.80% a year it costs well above the median fee in its multifactor EM group, where cheaper builds exist (EMGF at 0.26%, AVES at 0.36%).
• The factor screen and tiered weights can push results well away from headline cap-weighted EM indexes, in either direction.nasdaqomx.com
• Country and sector weights fall out of the ranking rules, so nobody is steering exposure toward or away from a given market.nasdaqomx.com

Full EMGF profile⁠

Full FEM profile⁠