RFEM: First Trust Active Factor Emerging Markets ETF
ETF Education Report: First Trust Active Factor Emerging Markets ETF (RFEM)
What this ETF is trying to do
The First Trust Active Factor Emerging Markets ETF (ticker: RFEM) is an exchange-traded fund that focuses on emerging markets. It holds a variety of different companies within its portfolio to achieve its goals.
What the numbers show
When looking at an ETF, it is important to understand two different types of returns: price return and total return.
• Price Return: This measures only the change in the share price. For RFEM, the one-year price return was approximately 30.56%. The three-year price return was approximately 81.98%.
• Total Return: This is a more complete measure because it includes the value of distributions (cash payments) made to investors. The one-year total return was approximately 34.50%, and the three-year total return was approximately 99.02%.
The current price of the ETF is $99.61. Based on the one-year price return, the estimated price from roughly one year ago was approximately $76.30.
Income and distribution explanation
Some investors look for ETFs that pay out cash, known as distributions. RFEM has a distribution yield of approximately 2.49%. This means the cash distributed is about 2.49% of the ETF's price. These distributions are usually paid out quarterly, with four payments recorded over the last 12 months.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases significantly. If an ETF's share price falls a lot, it can sometimes be a sign of erosion. However, for RFEM, the data shows an erosion-risk score of 100, which is labeled as "No price erosion detected." There is no severe erosion-risk flag for this ETF.
Top Holdings
The following are the Top Holdings in this fund (note that this list is partial):
• SAMSUNG ELECTRONICS CO LTD: 7.92%
• SK HYNIX INC: 3.83%
• UNIMICRON TECHNOLOGY CORP: 2.04%
• LENOVO GROUP LTD: 1.94%
• MEDIATEK INC: 1.69%
• KASIKORNBANK PUBLIC CO LTD: 1.59%
• BANK OF COMMUNICATIONS CO LTD CLASS H: 1.56%
• KIA CORP: 1.55%
• JENTECH PRECISION INDUSTRIAL CO LTD: 1.47%
• BANCO DE CHILE: 1.13%
*Please note that holdings can change over time.*
Pros
• The ETF has shown positive price returns and total returns over the one-year and three-year periods.
• The erosion-risk measurement is considered "good."
Cons
• The fund's performance is tied to emerging markets, which can be different from more stable markets.
Beginner takeaway
When studying an ETF like RFEM, remember that the price return and total return are different. The total return is often higher because it includes the cash distributions you receive. Always look at both to see how the fund is performing overall.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | n/a | n/a | 13.65% |
| 2 | SAMSUNG ELECTRONICS CO LTD | n/a | 7.92% |
| 3 | SK HYNIX INC | n/a | 3.83% |
| 4 | UNIMICRON TECHNOLOGY CORP | n/a | 2.04% |
| 5 | LENOVO GROUP LTD | n/a | 1.94% |
| 6 | n/a | n/a | 1.76% |
| 7 | MEDIATEK INC | n/a | 1.69% |
| 8 | KASIKORNBANK PUBLIC CO LTD | n/a | 1.59% |
| 9 | BANK OF COMMUNICATIONS CO LTD CLASS H | n/a | 1.56% |
| 10 | KIA CORP | n/a | 1.55% |