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Is Hartford Multifactor Developed Markets (ex-US) ETF (RODM) a Strong ETF Right Now?

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A smart beta exchange traded fund, the Hartford Multifactor Developed Markets (ex-US) ETF (RODM - Free Report) debuted on 02/25/2015, and offers broad exposure to the Broad Developed World 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.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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.

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 managed by Hartfordfunds. RODM has been able to amass assets over $1.09 billion, making it one of the average sized ETFs in the Broad Developed World ETFs. RODM seeks to match the performance of the Hartford Risk-Optimized Multifactor Developed Markets (ex-US) Index before fees and expenses.

The Hartford Risk-Optimized Multifactor Developed Markets (ex-US) Index seeks to de-concentrate country, currency, and individual company risks in developed market economies (ex US).

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.29% for this ETF, which makes it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 3.84%.

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, Fairfax Financial Hldgs Ltd Common Stock (FFH) accounts for about 1.14% of total assets, followed by Hsbc Holdings Plc Common Stock Usd.5 (HSBA) and Koninklijke Ahold Delhaize N Common Stock Eur.01 (AD).

RODM's top 10 holdings account for about 9.61% of its total assets under management.

Performance and Risk

So far this year, RODM return is roughly 9.57%, and it's up approximately 12.71% in the last one year (as of 12/18/2024). During this past 52-week period, the fund has traded between $26.48 and $30.82.

The fund has a beta of 0.81 and standard deviation of 14.07% for the trailing three-year period, which makes RODM a medium risk choice in this particular space. With about 342 holdings, it effectively diversifies company-specific risk.

Alternatives

Hartford Multifactor Developed Markets (ex-US) ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $76.58 billion in assets, Vanguard FTSE Developed Markets ETF has $136.44 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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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