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Is Northern Trust Morningstar Emerging Markets Factor Tilt ETF (TLTE) a Strong ETF Right Now?

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The Northern Trust 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 Emerging Market ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

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.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

Managed by Northern Trust Etfs, TLTE has amassed assets over $339.07 million, making it one of the average sized ETFs in the Broad Emerging 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

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 0.57% for TLTE, making it on par with most peer products in the space.

TLTE's 12-month trailing dividend yield is 3.39%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common accounts for about 6.85% of total assets, followed by Samsung Electronics Co Ltd Common Stock Krw 100 and Sk Hynix Inc Common Stock Krw 5000.

Its top 10 holdings account for approximately 25.1% of TLTE's total assets under management.

Performance and Risk

The ETF has added about 16.82% so far this year and is up roughly 20.26% in the last one year (as of 10/16/2026). In the past 52-week period, it has traded between $62.68 and $80.51

TLTE has a beta of 0.68 and standard deviation of 17.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 3039 holdings, it effectively diversifies company-specific risk .

Alternatives

Northern Trust Morningstar Emerging Markets Factor Tilt ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.

Vanguard Emerging Markets Stock Index Fund ETF Shares (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard Emerging Markets Stock Index Fund ETF Shares has $124.08 billion in assets, iShares Core MSCI Emerging Markets ETF has $153.53 billion. VWO has an expense ratio of 0.06% and IEMG changes 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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