Alpha Architect Freedom Price, Forecast, Insider, Ratings, Fundamentals & Signals

Emerging markets are off to a sluggish start to 2024. The Vanguard FTSE Emerging Markets ETF (VWO) was up 1.9% year-to-date through March 20, lagging the S&P 500 Index's nearly 10% gain.

The Freedom 100 Emerging Markets ETF focuses on investing in emerging markets that score well on personal and economic freedoms. The FRDM ETF's portfolio is heavily invested in Taiwan, South Korea, and Poland, with top holdings in semiconductors, battery technology, and financial services. FRDM stands out from other similar ETFs by excluding China from its portfolio and has performed strongly as a result.

In 2023, many people have had concerns about investing in broad emerging markets index ETFs. For some, this is based on fundamentals for Chinese stocks but for others it's national security.

While developed U.S. and non-U.S. markets indexes were up year to date through October 20, emerging markets benchmarks were treading water. The two largest emerging markets ETFs are the Vanguard FTSE Emerging Markets (VWO) and the iShares Core MSCI Emerging Markets (IEMG).

The Freedom 100 Emerging Markets ETF focuses on investing in countries that protect civil liberties and economic freedoms. The fund's exclusion of China highlights its relatively unique strategy that has impressively outperformed in recent years. We believe the fund can work in the context of a broader diversified portfolio for exposure to this important market segment.

Freedom 100 Emerging Markets ETF invests in emerging markets of Taiwan, South Korea, and Chile. Not surprisingly, it is highly focused on metals, technology, and financial sectors. My understanding is that FRDM is betting on the growth potential of lithium-ion, semiconductors, electronics manufacturing, and the future technologies. Despite being a futuristic fund, FRDM has generated strong-enough returns over the long run. However, it fails to generate satisfactory and consistent yield.

Emerging markets can come with a lot of growth potential. However, they also usually have more volatility than you might get with developed markets.

FRDM: Emerging Markets Are Hated So Much It May Be Time To Buy

Emerging markets are likely to outperform the benchmarks in the long term; however, not all emerging markets are equal. Evidence suggests that emerging markets in politically liberal regimes experience more growth than emerging markets in illiberal regimes.

VettaFi Financial Futurist Dave Nadig appeared on Yahoo Finance to discuss the big year for ETFs. “We had over 400 launches this year,” Nadig said, which he thinks could be a record.