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Is FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE) a Strong ETF Right Now?
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The FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE - Free Report) was launched on 09/25/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
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
TLTE is managed by Flexshares, and this fund has amassed over $238.27 million, which makes it one of the average sized ETFs in the Broad Developed Market ETFs. This particular fund, before fees and expenses, 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for TLTE are 0.59%, which makes it on par with most peer products in the space.
TLTE's 12-month trailing dividend yield is 3.48%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Samsung Electronics Co Ltd Common Stock Krw 100 (A005930) accounts for about 3.29% of total assets, followed by Taiwan Semiconductor Manufacturing Co Ltd Common and Alibaba Group Holding Ltd Common Stock Hkd (9988.HK).
Performance and Risk
Year-to-date, the FlexShares Morningstar Emerging Markets Factor Tilt ETF return is roughly 6.60% so far, and is up about 5.76% over the last 12 months (as of 09/01/2023). TLTE has traded between $41.69 and $52.06 in this past 52-week period.
The ETF has a beta of 0.81 and standard deviation of 16.85% for the trailing three-year period, making it a medium risk choice in the space. With about 2794 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Morningstar Emerging Markets Factor Tilt ETF is not a suitable option for investors seeking to outperform the Broad Developed Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $71.15 billion in assets, Vanguard FTSE Emerging Markets ETF has $72.70 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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 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?
The FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE - Free Report) was launched on 09/25/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
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
TLTE is managed by Flexshares, and this fund has amassed over $238.27 million, which makes it one of the average sized ETFs in the Broad Developed Market ETFs. This particular fund, before fees and expenses, 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for TLTE are 0.59%, which makes it on par with most peer products in the space.
TLTE's 12-month trailing dividend yield is 3.48%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Samsung Electronics Co Ltd Common Stock Krw 100 (A005930) accounts for about 3.29% of total assets, followed by Taiwan Semiconductor Manufacturing Co Ltd Common and Alibaba Group Holding Ltd Common Stock Hkd (9988.HK).
Performance and Risk
Year-to-date, the FlexShares Morningstar Emerging Markets Factor Tilt ETF return is roughly 6.60% so far, and is up about 5.76% over the last 12 months (as of 09/01/2023). TLTE has traded between $41.69 and $52.06 in this past 52-week period.
The ETF has a beta of 0.81 and standard deviation of 16.85% for the trailing three-year period, making it a medium risk choice in the space. With about 2794 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Morningstar Emerging Markets Factor Tilt ETF is not a suitable option for investors seeking to outperform the Broad Developed Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $71.15 billion in assets, Vanguard FTSE Emerging Markets ETF has $72.70 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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 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.