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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Flexshares. It has amassed assets over $266.19 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund seeks to match the performance of the Morningstar Emerging Markets Factor Tilt Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.57%.
It has a 12-month trailing dividend yield of 3.47%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common (Y84629107) accounts for about 5.09% of total assets, followed by Tencent Holdings Ltd Common Stock Hkd 0.00002 (0700.HK) and Samsung Electronics Co Ltd Common Stock Krw 100 (A005930).
TLTE's top 10 holdings account for about 16.55% of its total assets under management.
Performance and Risk
The ETF has added about 4.58% so far this year and was up about 11.17% in the last one year (as of 09/13/2024). In the past 52-week period, it has traded between $46.09 and $55.35.
TLTE has a beta of 0.77 and standard deviation of 16.02% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 2985 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 $77.82 billion in assets, iShares Core MSCI Emerging Markets ETF has $78.58 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Flexshares. It has amassed assets over $266.19 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund seeks to match the performance of the Morningstar Emerging Markets Factor Tilt Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.57%.
It has a 12-month trailing dividend yield of 3.47%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common (Y84629107) accounts for about 5.09% of total assets, followed by Tencent Holdings Ltd Common Stock Hkd 0.00002 (0700.HK) and Samsung Electronics Co Ltd Common Stock Krw 100 (A005930).
TLTE's top 10 holdings account for about 16.55% of its total assets under management.
Performance and Risk
The ETF has added about 4.58% so far this year and was up about 11.17% in the last one year (as of 09/13/2024). In the past 52-week period, it has traded between $46.09 and $55.35.
TLTE has a beta of 0.77 and standard deviation of 16.02% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 2985 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 $77.82 billion in assets, iShares Core MSCI Emerging Markets ETF has $78.58 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.