FDEM vs GEM

FDEMAFidelity Emerging Markets Multifactor ETF

GEMBGoldman Sachs ActiveBeta Emerging Markets Equity ETF

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.

GEM Goldman's 2015 ETF debut class included this one: emerging markets screened through four factors (value, momentum, quality, low volatility) across roughly 700 names for 0.35% a year. A full-market map with tilts, not a concentrated bet.

Stated mandate

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

GEM The Fund seeks to closely track, before fees and expenses, the Goldman Sachs ActiveBeta® Emerging Markets Equity Index, which provides exposure to equity securities of emerging-market issuers.

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

• GEM Four factors at once: good value, strong momentum, high quality and low volatility, scored stock by stock and blended, so no single tilt runs the portfolio.gsam.com
• 0.35% a year, below the median for emerging-market multifactor funds, with no fee waiver doing the work: the gross and net numbers are the same.
• Roughly 700 holdings gives it the breadth of a core EM index fund rather than a narrow factor sleeve, and it has been a multi-billion-dollar fund trading since 2015.
• One of the stronger implementations in a crowded multifactor emerging-market field, and it tracks a single named index rather than a shifting in-house process.gsam.com

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%.

• GEM Cheaper multifactor EM options exist: EMGF at 0.26% and FDEM at 0.25%, neither leaning on a waiver.
• Blending four factors mutes each one, so the tilt is gentler than a single-factor fund like AVES, which goes all in on value.
• Emerging-market stocks swing hard, and currency moves and country concentration come with the mandate. The factor screen tilts that exposure, it does not defuse it.

Full FDEM profile⁠

Full GEM profile⁠