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Is FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE) a Strong ETF Right Now?
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Launched on 09/25/2012, the FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Flexshares. It has amassed assets over $245.54 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, TLTE seeks to match the performance of the Morningstar Emerging Markets Factor Tilt Index.
The Morningstar Emerging Markets Factor Tilt Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global emerging equities markets, with increased exposure to small-capitalization stocks and value stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for TLTE are 0.59%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.10%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common accounts for about 2.11% of the fund's total assets, followed by Alibaba Group Holding Ltd Common Stock Hkd (9988.HK) and Samsung Electronics Co Ltd Common Stock Krw 100 (A005930).
The top 10 holdings account for about 13.46% of total assets under management.
Performance and Risk
So far this year, TLTE has lost about -1.80%, and is up roughly 8.20% in the last one year (as of 01/05/2024). During this past 52-week period, the fund has traded between $46.09 and $52.06.
TLTE has a beta of 0.83 and standard deviation of 16.62% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 2887 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Morningstar Emerging Markets Factor Tilt ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $72.33 billion in assets, iShares Core MSCI Emerging Markets ETF has $73.25 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE) a Strong ETF Right Now?
Launched on 09/25/2012, the FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Flexshares. It has amassed assets over $245.54 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, TLTE seeks to match the performance of the Morningstar Emerging Markets Factor Tilt Index.
The Morningstar Emerging Markets Factor Tilt Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global emerging equities markets, with increased exposure to small-capitalization stocks and value stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for TLTE are 0.59%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.10%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common accounts for about 2.11% of the fund's total assets, followed by Alibaba Group Holding Ltd Common Stock Hkd (9988.HK) and Samsung Electronics Co Ltd Common Stock Krw 100 (A005930).
The top 10 holdings account for about 13.46% of total assets under management.
Performance and Risk
So far this year, TLTE has lost about -1.80%, and is up roughly 8.20% in the last one year (as of 01/05/2024). During this past 52-week period, the fund has traded between $46.09 and $52.06.
TLTE has a beta of 0.83 and standard deviation of 16.62% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 2887 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Morningstar Emerging Markets Factor Tilt ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $72.33 billion in assets, iShares Core MSCI Emerging Markets ETF has $73.25 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.