What this ETF is trying to do

The First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS) is an exchange-traded fund (ETF). It focuses on small-cap companies located in emerging markets.

What the numbers show

As of October 9, 2026, the share price was $47.20. To understand how the fund has performed, we look at two different types of returns: price return (the change in the share price) and total return (which includes both the price change and the cash distributions paid to investors).

• Year-to-Date (YTD): The price return is 12.12%, while the total return is 15.03%.

• One Year: The price return is 8.95%, while the total return is 13.50%.

• Three Year: The price return is 25.57%, while the total return is 40.94%.

For a simple example, if you had invested $10,000 based on the estimated price from roughly one year ago ($43.32), the price-only growth (8.95%) would have increased that amount to approximately $10,895.

Income and distribution explanation

This ETF pays out cash to investors, usually every quarter. Over the last 12 months, it made 4 payouts totaling $1.80 per share. This results in a distribution yield of approximately 3.81%.

It is important for beginners to remember that a distribution yield is not the same as a total return. While the yield shows the cash paid out relative to the price, it does not tell you if the share price went up or down.

NAV erosion explanation

"NAV erosion" happens when the actual value of the fund's assets declines over time, which can lead to a falling share price. StockValueFinder uses an erosion-risk score to measure this.

FEMS has an erosion score of 100, and the erosion label states "No price erosion detected." The erosion severity is listed as "good," and there is no severe erosion-risk flag for this fund.

Pros

• The fund has shown positive price and total returns over the short and long term.

• It provides regular quarterly cash distributions.

• The erosion-risk measurements indicate a stable price trend.

Cons

• No specific holdings data was supplied, so it is unclear which companies the fund owns.

• Investing in emerging markets and small-cap stocks can be more volatile than investing in large, established companies.

Beginner takeaway

FEMS is a fund that gives investors exposure to small companies in emerging markets. It has provided both share-price growth and cash income over the last three years. While the distribution yield is a helpful source of cash, investors should always look at the total return to see the full picture of their investment's performance.