FDEM vs FEM

FDEMAFidelity Emerging Markets Multifactor ETF

FEMCFirst Trust Emerging Markets AlphaDEX Fund

In short

FDEM Value, quality, momentum and low-volatility screens run across emerging markets stocks, plus an unusual extra filter: a tilt toward names less correlated with US equities. Fidelity's in-house index, priced under the category median.

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

FDEM The fund seeks to track, before fees and expenses, the Fidelity Emerging Markets Multifactor Index.

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

• FDEM Four factor screens (value, quality, momentum, lower volatility) and then a twist most multifactor rivals skip: the index also leans toward stocks with lower correlation to the US market.sec.gov
• At 0.25% a year, it undercuts the typical fund in the international multifactor group, where the median sits at 0.38%.
• Rules over hunches: normally at least 80% of assets sit in index securities, so the screens drive the portfolio. Live since 2019, with distributions paid quarterly.sec.gov

• 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

• FDEM Selective by design: a couple hundred large- and mid-cap names, not the full emerging markets universe, so results diverge from plain market-cap EM index funds.sec.gov
• Emerging markets carry currency, political and regulatory risk. A low-volatility screen aims to soften the ride relative to the broad EM market, not to remove the risk.sec.gov
• Volume is moderate rather than heavy for the category, so spreads deserve a look on larger orders. The developed-market sibling FDEV runs cheaper at 0.18%.

• 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 FDEM profile⁠

Full FEM profile⁠